Today we are featuring one of our favorite industries of all times – construction contractors!  We have found that using tracking categories in Xero works well for construction contractors.

What are Tracking Categories?

Tracking categories are used in Xero to see how different areas of your business are performing.  Using tracking categories allows you to run reports to help you make good business decisions.

You can have up to two active tracking categories and 100 tracking options for each tracking category.

How Do Tracking Categories Work?

Okay, so far it might sound rather confusing. Let me show you an example of how you might use it within a construction business. 

Rebekah’s Building Company uses tracking categories to distinguish between commercial and residential jobs. They have one tracking category – Job Type and two different tracking options – Commercial and Residential.

Let’s see this in action:tracking pic 5

While reconciling a spend money expense, you will want to always assign a tracking code (in this case Commercial)
tracking image revised2



Now let’s see how this will show up on our reports.  In Xero go to Reports>All Reports>Financial |Income Statement.  Be sure to click on Compare Periods or Show Date Range and click on More options>Filter by [Tracking Category]

tracking categories 3


We can now see the income statement by each job type, such as in our example between commercial and residential jobs.  This can be very helpful for construction contractors who want to see the income, expenses, and profit for each job type or another measure.

If you would like to use tracking categories within your business and would like some help setting them up, contact us today at