How do you enable Class Tracking and use classes to segment reports by department or location?

• A. Enable Categories in Sales Tax to segment reports.
• B. Create custom fields to tag transactions; run Custom Field reports.
• C. Enable Class Tracking in Settings > Advanced, create classes, assign them to transactions, and run Class or Location-based reports.
• D. Use only Locations; Class Tracking is not needed.

Answer: (C)

The main idea here is using Class Tracking to break out your financial data by department or location. To do this, you first enable the feature in Settings, under Advanced. Then you create classes that represent the departments or locations you want to track (for example, Marketing, Sales, or a specific office location). Next, you assign the appropriate class to each transaction line item (so every sale, expense, or journal entry carries a class label). Once transactions have classes attached, you can run reports that summarize data by class, such as Profit and Loss by Class or Balance Sheet by Class, giving you a clear view of how each department or location performs. If you need location-based insights, you can set up classes to represent locations or enable location tracking and use the corresponding reports, rather than relying on categories or custom fields.