QuickBooks Classes vs Customers for Grant Tracking

One of the first decisions nonprofits face when setting up QuickBooks Online for grant tracking: should you use Classes or Customers (with Projects)?

Both can work. Neither is perfect. This guide helps you choose the right approach for your organization.

Quick Comparison

Feature	Classes	Customers/Projects
Track income by grant	Yes	Yes
Track expenses by grant	Yes	Yes
Budget tracking	Classes can support subdivided budgets in supported plans	Project features differ; verify current plan capabilities
Multiple donors per grant	Yes	No (major limitation)
Hierarchy/grouping	Sub-classes	Customer > Project
Time tracking	No	Yes
Profitability reports	Class reports	Project reports
Invoicing	N/A	Yes
Complexity	Simpler	More complex

When to Use Classes

Classes are better when:

• You have multi-donor restricted funds (multiple donors contributing to the same purpose)
• You want simplicity over features
• You don't need to invoice funders through QuickBooks
• You need one consistent reporting dimension across many grants
• You want to use Locations for programs separately

How Classes work for grants:

1. Create a Class for each grant (e.g., "Ford Foundation 2024")
2. Apply the Class to recognized revenue when appropriate under your accounting policy
3. Apply the Class to expenses when you spend
4. Run Class reports to see income/expenses per grant

Class hierarchy example:

Foundation Grants (parent)
├── Ford Foundation 2024
├── Kellogg Foundation 2024
└── Gates Foundation 2025

Government Grants (parent)
├── HHS Youth Services
└── DOE Education Grant

Limitations of Classes:

• Classes are reporting tags, not chart-of-account attributes, donor restrictions, self-balancing funds, or donor attribution
• A Class does not by itself calculate an authoritative grant balance
• Manual report compilation for funders
• No enforcement—easy to forget the Class

In supported QuickBooks Online plans, multiple fiscal-year budgets and Budget vs Actual reporting are available, and Classes can support subdivided budgets. Classes and relevant budget dimensions are plan-dependent and currently available in Plus and Advanced; verify Intuit's current plans and budgeting guidance rather than relying on pricing or old feature comparisons.

When to Use Customers/Projects

Customers are better when:

• You invoice funders for reimbursement (cost-reimbursable grants)
• You need time tracking against grants
• You want QuickBooks Online's Project Profitability reports
• Each grant has a single funder (no multi-donor situations)
• You have fewer grants to manage

How Customers/Projects work for grants:

1. Create a Customer for each funder
2. Create a Project under the Customer for each grant
3. Apply the Customer:Project to income and expenses
4. Use Project reports for profitability

Customer/Project structure:

Ford Foundation (Customer)
├── Youth Programs 2024 (Project)
└── Education Initiative 2025 (Project)

Gates Foundation (Customer)
└── Health Access Grant (Project)

Limitations of Customers/Projects:

• One customer per project — Can't have multiple donors on one restricted fund
• Workarounds required for multi-donor grants (Sales Receipts + JEs)
• Project budgeting capabilities may not match grant-budget requirements; verify the current QuickBooks Online plan and workflow
• More setup complexity

The Multi-Donor Problem

This is often the deciding factor.

Scenario: Three donors each give $10,000 toward your new building fund. In QuickBooks:

With Classes:

• Create one Class: "Building Fund"
• Record three deposits, each tagged with the Building Fund class
• Expenses tagged to Building Fund
• Works fine ✓

With Customers/Projects:

• Create a Project called "Building Fund"
• But under which Customer? Projects require exactly one Customer
• You'd need to create a fake "Building Fund" customer, or
• Use complex workarounds with Sales Receipts and Journal Entries
• Gets messy quickly ✗

If you regularly have grants with multiple donors, Classes are usually the better choice.

Hybrid Approach

Some organizations use both:

• Classes = Grants (funding sources)
• Customers = Actual customers/funders (for invoicing and receivables)
• Locations = Programs, sites, or another flat transaction-level dimension

This gives maximum flexibility but adds complexity. Every transaction potentially needs three tags.

Example transaction:

• Expense: $500 office supplies
• Class: Ford Foundation Grant (which grant pays)
• Customer: Ford Foundation (for A/R if needed)
• Location: Youth Services (which program benefits)

Our Recommendation

Operational recommendation: consider Classes when the following advantages match your reporting design:

1. Simpler to set up and maintain
2. Handles multi-donor grants without workarounds
3. Scales better with many grants
4. Leaves Customers available for actual customers/funders
5. Can work alongside Locations for a separate flat, transaction-level dimension

Use Customers/Projects if:

• You invoice funders through QuickBooks
• You need time tracking against grants
• Every grant has exactly one funder
• You have a small number of grants

Beyond Classes and Customers

Regardless of which you choose, QuickBooks Online dimensions alone do not provide:

• An authoritative remaining grant balance without a defined accounting and reporting process
• Restriction status tracking
• Funder report generation
• Compliance monitoring

A grant award is not automatically income. Unconditional contributions, conditional contributions, and exchange transactions have different recognition models. Classes and Customers/Projects do not establish release accounting or compliance; use a CPA-approved recognition policy.

If you need these capabilities, consider a grant management tool that integrates with QuickBooks, adding the grant-specific features while keeping your accounting in QuickBooks Online.

Making the Switch

Already using one approach and want to switch?

Classes to Customers:

• Create new Customer/Project structure
• Going forward, use new structure
• Historical data stays in Classes (for reference)
• Reports will need to combine both for full picture

Customers to Classes:

• Create Class structure
• Create a class for each existing Project
• Going forward, use Classes
• Consider mapping customers to "Funders" in your records

Switching mid-stream is painful. If possible, make the decision before you have significant historical data.

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How GrantLink supports this today

Add a grant manually or from PDF documents, then use its per-grant Expenses and Money received QuickBooks links to select the relevant Customers, sub-customers/jobs, Projects, Locations, or Classes. Expense links drive eligible automatic allocations. Money received is GrantLink's UI label for relevant QuickBooks Online income/revenue records and must not be equated mechanically with cash receipts.

Create reports in Chats > New Chat; completed reports then appear on the grant's Reports tab. GrantLink does not require one organization-wide tracking type and does not group the portfolio by parent Class. Any supported creation or update in QuickBooks Online requires the relevant workflow and explicit writeback permission.

GrantLink does not rewrite QuickBooks Online automatically; shared account mappings are restricted-account mappings only.

Sources

• Intuit: Get started with class tracking — class availability and transaction-versus-row assignment.
• Intuit: Create projects — Projects availability and Customer relationship.
• Intuit: Create budgets — supported budget subdivisions and plan limits.