Use Classes when you need to split costs by type of work, use Locations when you're tracking physical sites or business units, and use Projects when you're tracking an individual job or customer. For most specialty trade subcontractors, that third option gets skipped by mistake, and it's usually the one that matters most for knowing whether a job actually made money.
TL;DR:
- Classes support detailed line-item tracking, making them ideal for comparing margins between different types of work within the same invoice.
- Locations are better suited for whole-transaction tracking of physical sites or business units, with limits on combined class and location counts depending on the subscription.
- Projects are designed for tracking individual jobs or customer contracts and are essential for accurate job costing and budget management in construction trades.
- Switching from one list type to another requires manual remapping of data, with no automatic conversion, so plan carefully before setup.
- Running Profit & Loss reports by Class and Location helps monitor margins and site performance, but avoid having too many categories to keep reports manageable.
Table of Contents
- Understanding the technical difference between classes and locations
- When should you use classes, locations, or projects?
- How to turn on and set up class and location tracking
- Best practices for trade subcontractors using QuickBooks
- Which reports to run and what they actually tell you
- Fixing the most common setup and reporting mistakes
- What actually matters when you're running trade jobs
- How SubAscent keeps job costs accurate between the field and QuickBooks
- Sources
- FAQ
Understanding the technical difference between classes and locations
Classes and Locations look similar in the QuickBooks menu, but they behave differently once you start entering transactions. A class can be assigned per line item or to an entire transaction, which means a single bill can be split three ways if you bought materials for three different jobs. A location, by contrast, only attaches to the whole transaction. You can't split one invoice across two locations.
That distinction changes what your reports can tell you:
- Classes support line-level detail, so a Profit & Loss by Class can separate service work from installation work even within the same invoice.
- Locations are all-or-nothing, so they work best for things that don't change mid-transaction, like which yard or branch handled the work.
- Subscription limits cap how far you can push this. QuickBooks Online Plus allows a combined total of 40 classes and locations, while Advanced removes that ceiling entirely.
One more thing worth knowing before you commit to a structure: there's no button that converts historical transactions from one list type to another. If you've been coding jobs as classes for two years and decide to switch to Projects, that data has to be remapped by hand or migrated with a third-party tool.
When should you use classes, locations, or projects?
Pick based on what you're actually trying to measure, not on which field is easiest to fill in during data entry.
- Use Locations for physical places. A second yard, a satellite office, or a legally separate branch all fit here because the whole transaction belongs to one place.
- Use Classes for type of work. An electrical contractor splitting service calls from new construction, or an HVAC company separating installs from maintenance contracts, gets clean margin comparisons this way.
- Use Projects for individual jobs. This is the feature built for job costing, and it's the one QuickBooks recommends for construction subcontractors tracking a specific customer or contract.
A framing crew running jobs out of two yards might use Locations for "North Yard" and "South Yard," Classes for "New Construction" versus "Remodel," and a Project for every individual house. A plumbing outfit might skip Locations altogether if they operate from one shop, using only Classes for service versus new construction and Projects for each job number. Our job costing steps guide walks through setting this up transaction by transaction.
How to turn on and set up class and location tracking
Enabling these features takes a few clicks, but the settings you pick early are hard to unwind later.
- Go to Settings, then Account and settings, then Advanced, then Categories, and turn on Track classes and Track locations.
- Choose One to each row if you regularly buy materials for multiple jobs on a single bill or invoice. This keeps line-level detail intact.
- Choose One to entire transaction if your bills are almost always tied to a single job or type of work, since it's faster to enter.
- Build sub-classes or sub-locations only when you need the extra layer, and inactivate old entries instead of deleting them so historical reports stay accurate.
Pro Tip: Check your combined class and location count against your subscription limit before you build out a detailed hierarchy, so you don't hit the Plus cap halfway through setup.
Best practices for trade subcontractors using QuickBooks
The setup that works for most trade businesses is simple: Locations for where you operate, Classes for what kind of work you do, and Projects for which job you're on. That three-layer stack gives you richer reporting than any single method alone, and it maps cleanly onto how trades actually bill and staff work.
A few conventions keep this manageable as you scale:
- Keep class and location names short and consistent, like "ELEC-NEW" or "HVAC-SVC," so they sort predictably in reports.
- Cap your active list at a size you can actually scan. A Profit & Loss with 60 classes is not more useful than one with 12, it's just harder to read.
- Use One to each row whenever a single bill covers materials for more than one job, which is common for masonry, concrete, and electrical crews buying in bulk.
- Inactivate classes and locations tied to closed jobs or discontinued service lines instead of leaving them cluttering the list.
None of this replaces good field data. A class or location is only as accurate as what gets entered against it, and that's where a lot of trade businesses lose the thread between what happened on site and what lands in QuickBooks. Our piece on reconciling QuickBooks with job costs covers the gap that opens up when field data and office books drift apart.
Which reports to run and what they actually tell you
Two reports do most of the work once your classes and locations are set up. Profit & Loss by Class shows margin by type of work, so you can filter to compare, say, HVAC installs against HVAC service calls and see which line is actually paying the bills. Profit & Loss by Location does the same thing across physical sites or branches, useful if you're running crews out of more than one yard and want to know which one is carrying the business.
- Run Profit & Loss by Class monthly to catch a trade line sliding into negative margin before it becomes a pattern.
- Run Profit & Loss by Location quarterly if you operate multiple yards, since site-level swings tend to show up slower.
- Check the Projects dashboard for budget versus actual on every open job, not just the ones that seem behind.
QuickBooks' Projects feature includes a dedicated dashboard for budget versus actual tracking, which matters because a job can look profitable on a class report and still be bleeding money against its own budget. If you split materials per line instead of tagging the whole bill, your class report reflects the real mix of costs on that job, not just whatever class happened to get tagged first. Our job costing steps guide has sample report layouts for comparing two locations or two trade lines side by side.
Fixing the most common setup and reporting mistakes
Most problems trace back to a handful of causes.
- Too many classes or locations. If your P&L takes longer to read than the job took to bid, collapse similar segments and inactivate the rest.
- Jobs tracked as classes instead of Projects. There's no native convert function for this. Export your reports, map each class to a Project, and remap active jobs first before tackling closed ones.
- Classes not appearing on transactions. Check that class tracking is turned on for the specific transaction type and that the assignment mode, per row or per transaction, matches how you're trying to enter it.
- Anything touching historical financials or tax filings. Loop in your accountant before remapping data that's already been reported.
What actually matters when you're running trade jobs
Pick your structure once and stick with it. I've watched trade owners chase perfect categorization for months while their actual job costs sat untracked, and Projects always mattered more than getting the classes just right.
— Dave
How SubAscent keeps job costs accurate between the field and QuickBooks
QuickBooks tells you what happened after the fact. The gap most trade businesses feel is getting field data into QuickBooks fast enough to catch a job losing money while there's still time to do something about it. Job and bid management, PDF takeoff, and crew tracking can be handled through software solutions that sync data to QuickBooks so your Projects and Classes reflect what's actually happening on site.
It's worth adding if you keep missing job costs until the invoice is already out the door, if invoicing lags behind completed work, or if your field crews and your office are working from different pictures of the same job.
- Bid tracking to help manage invitations
- PDF takeoff tools to support faster, more consistent estimates
- Crew mobile app for daily reports and time tracking
- QuickBooks sync features to help keep job costing current
See how it fits your setup at Subascent.
Sources
Check these directly for exact menu paths, since Intuit updates its interface more often than most guides get revised. For broader site-management practices that pair well with QuickBooks reporting, see this digital site-management guide.
FAQ
What is the best way to learn QuickBooks?
The most direct path is working through Intuit's own support articles for the features you actually need, like class tracking or Projects, rather than trying to learn the whole platform at once. Many trade business owners pick it up fastest by setting up one real job correctly and using that as a template going forward.
Why don't accountants like QuickBooks?
Accountants' complaints usually target specific weak points, like limited job costing depth in lower-tier plans or the risk of clients miscoding transactions, rather than the software as a whole. Features like Projects and Cost Groups in QuickBooks Online Advanced address some of the construction-specific gaps that used to be common complaints.
Is QuickBooks being phased out?
No, QuickBooks Online continues to be actively developed and updated, including recent additions like Cost Groups for construction users. There's no public indication from Intuit of the product being discontinued.
Is a QuickBooks class worth the setup time?
Setting up classes is worth it if you need to compare margins across different types of work, like service versus installation, on the same set of books. For tracking individual jobs specifically, Projects is the better fit, and QuickBooks recommends it for construction subcontractors for that reason.