Set up tracking categories to monitor different areas of your business

Set up tracking categories to see how different areas of your business are performing (such as departments, cost centers, or locations). This way, your reports help you make proactive business decisions.

Tracking categories are not designed to be used for job costing. Check out Xero's App marketplace for a job costing solution that's right for your organization.

About tracking categories and options

  • Xero uses tracking categories and options instead of department codes or cost centers. This keeps your chart of accounts manageable.
  • You can have two active tracking categories.
  • You can have up to 100 tracking options for each tracking category.
  • A tracking category needs at least one tracking option to assign tracking to a transaction.

Set up a tracking category with tracking options

You can set up a tracking category with tracking options however you want, so we'll use an example to show you how it works.

Let's say you're a business with seven work locations. You can track sales at each location by setting up a tracking category with tracking options for each location.

  1. In the Settings menu, select General Settings.
  2. Under Reports, select Tracking.
  3. Click + Add Tracking Category.
  4. Under Tracking category name, enter the name of the tracking category. Enter your tracking option names under Category options.
  5. Click Save.

    Location tracking category and options

Once a tracking category has been set up, you can add new tracking options when creating transactions. To do this, click into the tracking field, then click on the arrow and select +Add new tracking option.

Assign a tracking option to a transaction

Track new transactions

Assign a tracking option to new transactions such as invoices, bills, quotes, purchase orders, spend money and receive money transactions, and transfer money transactions.

Track new transactions

Track previous transactions

Assign a tracking option to previously-entered transactions such as invoices, bills, quotes, purchase orders, spend money and receive money transactions, and transfer money transactions to run reports about previous business performance.

Track previous transactions

Track bank transfers

Assign a tracking option to transfers you make between bank accounts.

Assign a tracking option to a transfer between bank accounts

Track fixed assets

Assign a tracking option when you create a new fixed asset.

You can also add tracking options to the import file when you import fixed assets into Xero.

Track a budget

Assign a tracking option to a budget you've created in Budget Manager.

Set up a new budget with tracking

Track a contact

You can set up default tracking options for contacts. Just select the tracking category when creating new transactions for the contact.

Default tax treatment, account and tracking settings

Track payroll expenses

Assign tracking options to an employee or an employee timesheet to track payroll expenses by employee groups or timesheets.

Review reports by tracking category

Review and filter reports by tracking category and category option to see the performance of different areas of your business.

Tracking Summary Report

View specific data from a tracking perspective. You can customize specific groups of accounts.

Budget reports

Filter the following reports by tracking category and category option:

New financial reports

Add a tracking column to any of these new reports using the report layout editor:

Other reports

You can filter the following reports by tracking category:

You might also be interested in