--- title: "Tracking Income Streams With Classes and Locations | MCC" description: "How to use classes, locations or tags in accounting software to see profit by product line, location or event without splitting your chart of accounts." url: "https://mcc-solutionsnj.com/bookkeeping/guides/classes-and-locations-to-track-income-streams" --- Bookkeeping guide · Updated October 12, 2026 # Tracking Income Streams With Classes and Locations A business with several income streams needs to know which ones pay. Instead of multiplying accounts, accounting software offers tags that slice the same transactions another way. Used well, they answer questions the standard reports cannot. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** Classes and locations are tags that slice the same transactions another way, so you can see which income streams pay without multiplying accounts in the chart of accounts. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) · [Void vs delete a transaction](/bookkeeping/guides/voiding-vs-deleting-transactions) **Free tools:** [Net profit margin calculator](/bookkeeping/net-profit-margin-calculator) · [How many sales do I need to break even?](/bookkeeping/break-even-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## The problem tags solve Imagine a shop that sells goods, offers repairs and teaches classes. A single sales account shows total income but not which line grew. Creating separate accounts for each stream and each cost multiplies the chart of accounts quickly and becomes unmanageable. Tags let you keep one clean chart of accounts and add a second dimension to each transaction. ## Classes, locations and tracking categories Different programs use different names. QuickBooks Online calls them classes and locations. Xero uses tracking categories. Zoho Books uses reporting tags. All attach labels to transaction lines, and reports can be filtered or grouped by them. Check which plan includes the feature, since some tiers limit it. ## Design the tags before using them Choose what you want to learn. Product lines, physical locations, events, markets, or owners of a department are common. Keep the list short, with clear names, and decide whether each transaction needs a tag or only some do. Two dimensions at most is wise. More than that becomes hard to keep consistent. ## Handle shared costs Some costs serve every stream, such as rent or software. Either leave them untagged as general overhead, or split them by a rule like revenue share or square footage. Write the rule down so the allocation does not shift from month to month. Revenue and direct costs are usually easy to tag. Overhead splitting is optional and involves judgment. ## Keep it consistent The reports are only as good as the tagging. Turn on any option that requires a tag on each line. Use bank rules to apply tags to repeat transactions. Review a profit by tag report monthly and look for untagged amounts. If you start mid-year, apply tags to prior months where practical so trends compare properly. Use the results to decide where to invest time, raise prices or cut offerings. ## A short example A café with a catering side tags each sale and cost as either counter or catering. After three months, the profit by tag report shows that catering brings in less revenue but carries a much better margin, while counter sales cover most of the rent. The owner decides to promote catering and adjust counter hours. Without the tags, the totals would have looked fine and the decision would have been based on feel. A little consistency in tagging made the choice clear. Remember to review the tagging when the business changes, adding a new tag for a new service rather than overloading an old one. Check regularly that tagged totals add up to the overall profit and loss. If a report by tag shows a large untagged column, fix the missing entries before relying on the comparisons. ## Common questions **Do tags change the tax return?** No. They are for internal reporting. The chart of accounts drives tax categories. **Can I add tags to old transactions?** Often yes through batch edits or imports, depending on your software. **Are tags the same as sub-accounts?** No. Sub-accounts split an account itself. Tags apply across accounts. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online)[### Xero Bookkeeping and reconciliation in Xero for New Jersey small businesses, including cleanup and moving from spreadsheets or another program. Xero →](/bookkeeping/software/xero)[### Zoho Books Bookkeeping and reconciliation in Zoho Books for New Jersey businesses, especially those already using other Zoho apps. Zoho Books →](/bookkeeping/software/zoho-books) More guides - [Voiding vs Deleting Transactions in Accounting Software](/bookkeeping/guides/voiding-vs-deleting-transactions) - [How to Prepare Your Records for a Tax Preparer](/bookkeeping/guides/how-to-prepare-records-for-your-tax-preparer) - [Questions a Tax Preparer Will Ask About Your Books](/bookkeeping/guides/questions-a-tax-preparer-will-ask-your-bookkeeper) - [Sole Proprietor Bookkeeping Basics and Tax Records](/bookkeeping/guides/sole-proprietor-bookkeeping-basics) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)