Class Tracking
Definition
A feature in QuickBooks (and "tracking categories" in Xero) that tags transactions by segment, such as sales channel, brand or location, so you can run a P&L for each one.
Want a deeper explanation?
Class tracking turns one company P&L into a P&L for each channel or brand without cluttering the chart of accounts. It is one of the most useful setups for multichannel sellers.
It only works if every transaction is tagged consistently. Watch for: an "unclassified" column on your class report, which shows how much of the business is not being measured.
Example
Tagging every sale, fee and ad cost by Amazon, Shopify and Wholesale shows Amazon at 38% of revenue but only 22% of contribution margin.