Tracking in Xero lets you see how different areas of your business are performing. This means you don’t need individual account codes for different parts of the business (such as departments, cost centers, or locations), keeping your chart of accounts manageable. his way, your reports help you make proactive business decisions.
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.
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.
Review reports by tracking category
It is possible to review and filter reports by tracking category and category option to see the performance of different areas of your business.