If you’re a home builder using QuickBooks Online (QBO), there’s one feature that can completely change the way you look at your numbers: class tracking.
Most builders don’t even know this tool exists—but once you turn it on, it becomes much easier to see which jobs are making money and which ones are falling behind.
In this post, I’ll walk you through exactly how I set up class tracking for my builder clients, the common mistakes to avoid, and why it’s one of the most powerful ways to stay on top of job costs.
Why Class Tracking Matters for Builders
As a former home builder and now a QuickBooks Pro, I’ve seen the same issue again and again: builders looking at a Profit & Loss (P&L) report and wondering why it doesn’t show how each job performed.
QBO’s standard reports only show your overall business profit. But what you really need is a clear view by project, phase, or even trade.
That’s where class tracking comes in.
It lets you tag every cost and sale with a label—called a “class”—so you can sort your numbers in a way that makes sense for how you build homes.
Step-by-Step: How to Set Up Class Tracking in QuickBooks Online
Here’s how I set it up for home builders:
1. Turn On Class Tracking
Go to:
Settings > Account and Settings > Advanced > Categories
Then switch on Track classes. This enables the class feature in your QBO account.
2. Choose “One to each row in a transaction”
This step is important.
Choose the option to apply one class to each row in your bills, invoices, checks, and more. This gives you the power to track costs by line item—not just by whole transactions.
3. Create a Class List That Matches Your Jobs
This part is all about how your brain (or your team) organizes jobs. Some builders like to set up classes based on:
By Lot or Job:
- Lot 12 – Maple Street
- Lot 14 – Pineview Estates
- Spec Homes
- Warranty Work
Or you might prefer classes based on trades or phases:
By Trade:
- Framing
- Electrical
- Roofing
Choose what fits your business best.
4. Train Your Team to Use It Consistently
No system works unless your team uses it every time.
Whether they’re entering bills, writing checks, or sending estimates, make sure every transaction has a class.
It only takes a second—and it makes your reporting 100x more useful.
5. Run Custom Reports That Actually Help You
Once everything is being tagged properly, go to Reports > Profit and Loss by Class.
Now you’ll see:
- Profit margins per job
- Which trades are running over budget
- Where your profits are coming from
- And where you’re losing money
This is where real job costing begins.
Common Mistakes Builders Make with Class Tracking
While class tracking is simple, there are a few common mistakes that can lead to confusing reports or missed insights. Here are the top ones I see:
🔴 1. Using Classes for Everything
Some builders try to use classes to track vendors, customers, or payment types. That’s not what classes are for. Classes are best used to track jobs, trades, or cost categories.
✅ Tip: Keep classes job-focused. Use locations, vendors, or custom fields for other types of data.
🔴 2. Forgetting to Tag Every Line
It’s easy to skip a class tag when entering a bill or invoice. But even one missing tag can throw off your job reports.
✅ Tip: Make it part of your bookkeeping checklist—every transaction gets a class, no exceptions.
🔴 3. Overcomplicating the Class List
Too many classes can overwhelm your team and make reporting harder, not better.
✅ Tip: Start simple. Focus on tracking major jobs or trades. You can always add more classes later.
🔴 4. Mixing Classes and Locations
QuickBooks Online also has a “Location” tracking feature. Don’t try to use both for the same thing.
✅ Tip: Use classes for jobs or phases, and use locations only if you run multiple divisions or regions.
🔴 5. Not Reviewing Reports Regularly
Setting up class tracking is only helpful if you actually look at the reports. Many builders forget to check them until it’s too late.
✅ Tip: Review your “Profit and Loss by Class” report at least once a month—more often if you’re mid-project.
Real-World Example: Catching Scope Creep Early
One of my builder clients started tagging all change orders and add-ons to their classes. After just one month, they saw that several jobs were losing margin because of extra work that never got billed correctly.
Thanks to class tracking, they spotted the issue before the job closed—and were able to fix it on the fly.
Final Thoughts: Why Every Builder Should Use Class Tracking
If you’re a home builder using QuickBooks Online, class tracking is your best friend. It’s easy to set up, easy to train on, and gives you instant insight into your job performance.
Instead of guessing, you’ll know:
- Which jobs are making money
- Which ones are draining your profits
- Where to cut back
- And where to double down
Need Help Setting It Up?
I’ve helped dozens of builders get this right, and I’d be happy to walk you through it too. Drop a comment below or reach out through the contact page!
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