When you first started your business, you might have been able to keep track of your merchandise by counting manually. As you and your product list grew, this became impractical. You might have recorded it all in a spreadsheet, or even a box full of notecards.
Whether you sell products or services or both, you need records of specific items to use in transactions and reports. Those records are especially important if you have physical inventory; they can store details that help you know, for example, when it’s time to reorder.
Building a database of your inventory is time-consuming work that requires a lot of detail, but the information it supplies will be of great significance as you make critical buying decisions.
To get started, click the gear icon in the upper right corner of QuickBooks Online and select Products and Services under Lists. A table will open that will eventually contain a comprehensive list of what you sell. Click New in the upper right corner, and the Product/Service information pane slides out. You’ll see your four options here:
· Inventory: Products you buy and/or sell
· Non-inventory: Products you buy and/or sell that don’t require tracking
· Services: Services you sell
· Bundle: Products and/or services that you sell together
We’ll focus on the first option. Click Inventory. Enter the product’s Name and SKU (if there is one) and click the pencil icon to upload a photo if you’d like. If this item is going to be a sub-product or service of another, you’d click the box in front of that option and select the “parent” product or service from the drop-down list.
Enter the number in the field to the right of Initial quantity on hand, and then enter the as of date in the next box. When your stock level hits a certain number, you’ll want to reorder more. Enter that number in the box to the right of Reorder point.
Your item needs to be assigned to an Inventory asset account for tracking and reporting purposes. This field should default to Inventory Asset. If it doesn’t, or if you want a more thorough explanation of this element of accounting, contact us for assistance.
Enter a description of the item in the Sales information box; this will appear on sales forms. What will your customers be charged for it? This is the Sales price/rate. The Income account should automatically display Sales of Product Income, and you should click in the box in front of Is taxable if that’s the case.
If you buy the item to resell, enter a description in the Purchasing information box, and provide your Cost, the price you pay when you buy the item from another source. The Expense account should default to Cost of Goods Sold.
When you’re done, save the record.
You don’t have to create records for absolutely every product or service you sell before you start using them. When you create an invoice, for example, and you open the drop-down list under Product/Service, the option at the top of the list will be + Add new. Select that, and the Product/Service information pane opens. You can create a record on the fly.
To get to the list of the product and service records you’ve created, click the gear icon in the upper right and select Products and Services. You’ll see a screen similar to the one pictured above. You’ll also notice that you can link to several action screens from each entry.
If you maintain careful item records, you’ll be able to create a number of reports that can advise you on the state of your inventory. Click on Reports in the toolbar, and then All Reports | Manage Products and Inventory. These reports are fairly self-explanatory, but by customizing them, you can get even more focused insight. We can help you with this. We’d also be happy to go over any other aspect of inventory-tracking and management that’s confusing. Just let us know when you want to get started.
Exigo Business Solutions | Kansas City Metro | Providing QuickBooks Consulting, Bookkeeping/CFO services, and Accounting Technology Solutions by a team of Advanced Certified ProAdvisor's' using our experience of working with small businesses to positively impact your bottom line. As an Intuit Premier Reseller of QuickBooks technology solution, we are experts in implementing and troubleshooting QuickBooks. Visit our website https://www.exigobusiness.com/ or give us a call at (816)394-6818 for more information.
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