You can use classes to track income and expenses by the types of products
The Sample Manufacturing Company included with QuickBooks makes two kinds of
pool covers: manual and automatic. That company could use classes to track
whether they are making more profit on the manual or the automatic pool cover
The Sample Wholesale-Distribution Company included with QuickBooks sells,
buys and distributes light fixtures. That company could use classes to track
whether they are making more money selling track lighting rather than bath or
vanity fixtures. If bath and vanity fixtures has a much higher profit margin,
that might influence how the company allocates advertising dollars the
If you decide to use classes to track profitability by product line, you
first need to set up classes.
Create a class for each
When you enter bills
into QuickBooks, assign the appropriate product line to the charges in the
When you create an
invoice, assign the appropriate product line to the income in the Class
Note: You must
customize the Purchase Order,
Sales Order, and Invoice forms to add a Class column and make sure that you
provide the information for each item. If you do not, some income and expenses
may not have a product line associated with them, and reports will not
accurately reflect profitability by product line.
If you create a class for each product line, you can view the
Profit and Loss by Class report to
see your business income and expenses categorized into the product lines that
you created for your business. That report will calculate the total amount of
income and cost by product line.
To see a sample of this report, open one of the QuickBooks sample company
files. Go to the Reports menu, choose Memorized Reports, choose Item/Product Reports, and then click Profitability by Product Line.
Adding a class
Profit and Loss by Class