Category Archives: Products & Services

Handy reference to inventory item fields

Here is a handy reference on how to fill out fields in an inventory item screen you are creating.

You might not see some of these fields in your inventory item screen depending on your choices in Company Gear icon (upper right corner). You will need to enable Quantity on Hand (QOH) inventory tracking in Company Settings.

From the home page screen:
- Company Gear (upper right corner)
- Settings
- Company Settings
- Sales
- Products and Services
 
Show Product/Service column on sales formsAdds a Product/Service column on sales forms so you can choose from a list of products and services to include.
Track quantity and price/rateAdds Quantity and Rate fields to sales forms so you can track this information for products and services.
Track quantity on hand Lets you track available stock for each product you sell and its related inventory costs.

Click on the screenshots below to enlarge them
inventory tracking settings

Inventory item screen fields

FieldsReference Guide
NameEnter the name of the product item you are selling or Stock Keeping Unit (SKU). SKU could be manufacturer's part name or your own unique product code.
SKUManufacturer's part number or your own unique product code.
Note: You cannot select SKU on sales forms at this time. However, you can search it on Products and Services page.
Upload PhotoRecommended dimensions are 120 x 120 pixels.
Is sub-product/serviceIf the product is a sub-item, select it from the list under parent product name. Do not use parent product name. In our example, "Tools" is the parent product name and "Pipe Wrench" is the sub product item.
Track Quantity on Hand (for inventory items)
I track quantity on hand for this product. This enables inventory cost accounting.
When you select this checkbox, "Initial Quantity On Hand" and "As Of Date" fields will be displayed.
Initial Quantity On HandEnter a zero or actual quantity on hand. Bear in mind!! These two factors must be taken into account when computing actual quantity on hand: 1) all vendor purchased inventory items are recorded in QuickBooks (no unentered vendor bills left); 2) all sales invoices and sales receipts are shipped out (no outstanding shipments left).
Make sure actual quantity you are entering is 100% accurate. QBO is not that friendly when it comes to making inventory adjustments later.

As Of DateEnter "as of date".
Inventory Asset Account
Use default "Inventory Asset" account. It is best not to change it.
Sales Information
Description on sales forms
This is what the customer/client see on all sales forms (invoices and sales receipts).
Purchasing Information
Description on purchase forms
This is what the vendor sees on purchase orders.
Price/RateEnter the price you will sell it for. You can also change this price when creating a sales form.
CostEnter actual cost if you have "initial quantity on hand". Do not create sales form if you have zero Quantity on Hand.
Income account
(Sales of Product Income)
Default is "Sales of Product Income" account. It is okay to select other product income account.
Expense account
(Cost of Goods Sold)
Default is "Cost of Goods Sold" account. It is better not to change it.
Is taxableSelect "Is taxable" checkbox if the product item you are selling is taxable.

inventory fields

 

YouTube Tutorial Video:

#QuickBooks: Can I keep a simple inventory of all shop equipment

Question: Can I keep a simple inventory of all shop equipment in QuickBooks Online?

I need to list all shop equipment we have here in the shop. I just need the item and quantity. We do not sell these items so there are no prices involved, its just the equipment we use in the day to day business.

Answer: Yes You Can!

You will need PLUS plan do this tracking. Essentials and Simple Start do not have tracking features.

First, make sure to enable the tracking feature setting ON.
From the home page screen > gear (company gear) > settings > company settings > sales > products and services > tracking features ON (Track quantity and price/rate and Track quantity on hand) > save

Click on the screenshots below to enlarge them
track settings

Second, create a new dummy Inventory Item called Shop Equipment, then any items you create for the actual “Shop Equipment” (parent) will be marked as sub-items of that dummy Inventory Item.

To create a new item:
From the home page screen > gear (company gear) > settings > products and services > new (upper right corner)

When you create the new items:

  • Select “I track quantity on hand for this product” checkbox.
  • Enter “Initial Quantity on Hand.”
  • Enter “As of Date.”
  • Purchasing Information: enter information for more details (optional).
  • Cost: DO NOT ENTER A COST (leave it blank for the cost field). Equipment Inventory for this special work-around method in QBO cannot track the cost of the item. If you enter the cost your accounting will be totally messed up. It will add value to the Inventory Asset Account.
  • SAVE

1equipment

2equipment

3equipment

4equipment

5equipment

You can also create a customized Equipment Inventory Report if necessary.

To create customize report:
From the home page screen > gear (company gear) > settings > products and services > run report (upper right corner)

  • Select “Customize” button
  • Choose “Change Columns” under Rows/Cloumns
  • Add “Create Date” (this will give you information on when this was added)
  • Remove not needed columns (like description, price, cost)
  • Go to Header/Footer section and change “Report Title” as you need it
  • Run Report
  • Select “Save Customizations” blue button (if you want to create your own customized report for future use). Next time go to report and select “My Custom Reports, this report will be on the list.

6equipment

Weekly Price Check US CA UK AU (Plus Plan)

USACanadaUKAustralia
us120x90ca120x90uk120x90au120x90
USD 23.97 per monthCAD 14.50 per monthGBP 15.00 per monthAUD 21.00 per month
USD 23.97 per monthUSD 12.01 per month
(Conversion)
USD 23.30 per month
(Conversion)
USD 16.60 per month
(Conversion)
LOWEST PRICE!

How does “Inventory in and out” work in QuickBooks Online Plus?

First, let’s start with understanding what “Inventory in and out” means in QBO. It means you will be adding (in) purchased inventories to Inventory Assets account that is current assets type to the chart of accounts and you will be subtracting (out) sold inventories quantity/cost when you create Sales Form (either Invoice or Sales Receipt), which will be posted to COGS account.

Yes, you do need Plus plan to have Inventory feature in QBO. Inventory feature is not available in QBO Simple Start and QBO Essentials.

You will use the vendor forms (expense, check, bill) to enter “inventory in” (add to inventory asset). Journal Entry form will not work to enter “inventory in”.

Blank Vendor Bill Form
Click on the screenshots below to enlarge them
1 bill form account
Let’s look at the blank vendor bill form (above) before making any feature setup changes. The form has “Account” column (part of chart of accounts), but no “Item Details” with columns like “Product/Service”, “Quantity” and “Rate”. We do not enter “inventory in” yet. We go through the steps below to make “inventory in and out” work:

STEP 1: Enable products and services settings ON

  • From the home page screen
  • Company Gear (upper right corner)
  • Settings
  • Company Settings
  • Sales
  • Products and Services
    1. Show Product/Service column on sales forms ON
    2. Track quantity and price/rate ON
    3. Track quantity on hand ON
  • Save / Done

2 products and services settings

 

STEP 2: Create new products and services (or item list) for inventory item

  • From the home page screen
  • Company Gear (upper right corner)
  • Lists
  • Products and Services
  • New
  • Fill out Product or Service Information
  • Inventory Name
  • To Track Quantity on Hand (for inventory items)
    Select checkbox > I track quantity on hand for this product. This enables inventory cost accounting.
  • Initial Quantity On Hand (enter “0” for new item)
  • As Of Date = today’s date
  • Inventory Asset Account = Inventory Asset (Default account. Do not select other account or create new one.)
  • Sales Information = Description on sales forms (Invoice or Sales Receipt)
  • Purchasing Information = Description on purchase forms (Purchase Order)
  • Price/Rate = Sales Price (will see it on Invoice or Sales Receipt)
  • Cost = Purchase Price (will see it on Vendor Forms like Bill, Check, Expense)
  • Income Account = Revenue/Sales account from the Chart of Accounts (will later see it on P&L Report)
  • Expense Account = COGS from the Chart of Accounts (will later see it on P&L Report)
  • Checkbox if product is taxable. To setup sales tax (left blue navigation bar > sales tax)
  • Save and Close

3.1 add new inventory
3.2 add new inventory

 

STEP 3: Enter “Inventory in” by using Vendor Forms (Bill, Expense, Check) and selecting Item Details section (Not Account details section)

  • Choose a Vendor (name of the company you bought inventory item)
  • Fill out necessary information and move to Item Details section
  • Product/Service = inventory item you want to add in (in this example, mountain bike)
  • Description should prefill once you enter product/service item. You can change it if necessary to track more information.
  • Qty = quantity purchased per vendor bill
  • Rate = purchase price per vendor bill
  • Amount = total purchase amount per vendor bill (qty x rate)
  • Save

4 enter bill for inventory

 

STEP 4: Enter Inventory out by creating Sales Forms (Sales Receipt, Invoice)

  • Choose a Customer/Client (name of the company you sell inventory item to)
  • Fill out necessary information and move to Product/Service section
  • Product/Service = inventory item you want to sell (in this example, mountain bike)
  • Description should prefill once you enter product/service item. You can change it if necessary to track more information.
  • Qty = quantity customer buying
  • Rate = price customer paying
  • Amount = total revenue/income amount (qty x rate)
  • Save

5 sales receipt inventory out

 

You can run built-in Inventory Valuation Detail Report (left navigation bar > report > go to report and select the report) to review in and out of inventory product item. In this example (Item = Mountain Bike):

  • Inventory “in”
    Quantity = 10
    Rate = $200
    Total Inventory Amount = $2,000.00
  • Inventory “out”
    Quantity = 4
    Rate = $300
    Total Sales Amount = $1,200
  • Inventory “on hand”
    Quantity = 6
    Valuation = $1,200 (6 x $200)

6 inventory valuation detail

For the income side (you can run Profit and Loss report and customize the columns for products/services), you should have $400 gross profit (qty 4 x $100 profit per item)

  • Sales = $1,200 (qty 4 x sales price $300)
  • Cost = $800 (qty 4 x cost price $200)

7 profit and loss

 

FIFO (First-in, First-out) Method

QuickBooks Online uses the FIFO method of inventory valuation. As the name implies, QuickBooks Online will always consider the first units purchased (First In) to be the first units sold (First Out) and will adjust your Inventory Assets and Cost of Goods Sold (COGS) accordingly whenever sales of inventory items are entered.

Let’s expand this case by adding a few more transactions here.

As of previous example, we have 6 units left in stock. They were purchased at $200.00 per unit. Total inventory valuation amount is $1,200 ($1,200).

Let’s suppose, we purchased 10 more units of bikes at $220.00 per unit (total bill = $2,200).

  • Our new total inventory valuation = $3,400 (1200 + 2200)
  • Our new quantity on hand = 16 (6 from previous purchase + 10 from new purchase)
  • Our new average cost = $212.50 ($3,400 divide by 16 stock units)

8 fifo inventory valuation

Let’s suppose, we sold 8 units. What would be the COGS now?

  • 6 units @ $200.00 = $1,200
  • 2 units @ $220.00 = $440
  • Total COGS for 8 units = $1,640

9 profit and loss

 

#QBO Plus

 

How to delete posted transaction to Inventory Shrinkage (COGS) account in new QuickBooks Online?

From the home page screen

  • Go the Company “Gear” upper right corner
  • Select the Chart of Accounts under Settings heading
  • Select “Inventory Asset” account
  • Double click “ Inventory Asset” and the Asset Register for Inventory Asset will open
  • Locate “Inventory Qty Adjust” posted to “Inventory Shrinkage” account to delete
  • Double click the transaction line and Delete bar (along with three other options) will open
  • Selete “Delete” option
  • It will prompt with “Yes” or “No” message
  • Choose “Yes” button
  • Done.

QuickBooks Online: How to delete posted transaction to Inventory Shrinkage COGS Account