Last Updated on March 14, 2022
Inventory holds the most significant place in an online business or store. It is where the stock is kept and is regulated from time to time so that the owner of the business shall get updates on which item to reorder and which one got to be discontinued to stay in the profit-margins. No wonder QuickBooks also has a special utility dedicated to inventory management, often known as QuickBooks Inventory Tracking. However, setting it up to run as per your needs is the real deal, and also it is where the trouble starts. So today, we will discuss it in detail below.
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What are the Requirements to Set up Inventory in QuickBooks?
- Name (Required): The name of the item.
- Picture (Optional): Any picture of the item or product.
- SKU (Optional): A stock keeping unit number to identify the item in the inventory.
- Category: Use this drop-down to categorize the item to similar products’ list.
- Initial quantity on hand (Required): Enter the quantity of the item that you have in the inventory as of the moment. However, if you are not adding it at the beginning of the financial year, enter 0 and later change it when you receive stock from the supplier.
- As of date (Required): Enter the date that you want to start tracking or started tracking the given item’s quantity on hand.
- Reorder point (optional): Enter the amount of the product you want to get notified on for a refill by the QuickBooks.
- Inventory asset account (Required): Click on the drop-down and select the Inventory Asset.
- Sales information: Enter the product description to appear on the invoices and sales receipts in this field.
- Sales price/rate: Enter the selling price of the item in this field, however, you can leave it if you are planning to sell the product with different prices from customer to customer.
- Income account (Required): In this drop-down, choose the account you would like to track all the sales of the item. However, if you would like to create a new account for the item, scroll down till the end of the drop-down and click on the Add new.
- Tax: If this drop-down does not show in your QuickBooks, set up the sales tax slab on your QB Online. Choose the tax rate you want to use for this item.
- Purchasing Information: Enter the information that you want to appear on the purchase orders when you create them.
- Cost (Optional): Enter the purchasing cost of the item.
- Expense account (Required): Click on this drop-down to select the account to track the cost of the item units sold on the online store.
How to Track Inventory in QuickBooks Desktop for both Inventory and Non-Inventory Parts?
Here are the steps through which you can use the QuickBooks inventory management software to set up tracking for both inventory and non-inventory parts:
Inventory
- Go to QuickBooks and from the menu bar, select Edit.
- On the next Windows that appears, click on Preferences.
- Next, select Items & Inventory and then click on the Company Preferences tab.
- Enable the inventory tracking by checking on the box stating- “Inventory and purchase orders are active”.
- Click on OK.
- Go back to the Home window and choose the Items & Services option.
- Select the Item button and select New.
- Click on the Type drop-down, and choose the option of Inventory Part.
- Fill the required information with the name of the inventory item in the Item Name/Number space.
- Now choose the account to record income from the said inventory item by clicking on the Income Account drop-down.
- Complete the rest of the boxes with relevant information and click on OK.
Non-Inventory
- Navigate to the Home window and click on the Items & Services.
- Click on the Item button and select New.
- The action will open a New Item window and you would need to click on the Type drop-down and select the Non-Inventory Part.
- Fill up the required information in the next window by adding the name of the item in the Item Name/Number.
- Now choose the account you want to put to track the item by clicking on the Account drop-down.
- Complete the rest of the boxes with relevant information and click on OK.
Here comes the point where we pull down the drapes on our article on QuickBooks Inventory Tracking. Hope the content written here will be relevant to your search queries and help you to resolve issues if any. On a different note, if there are any errors you are facing within inventory that aren’t mentioned in this blog, solve them externally by calling on error support number 1.855.738.2784 anytime.
Edward Martin is a Technical Content Writer for our leading Accounting firm. He has over 10 years of experience in QuickBooks and Xero. He has also worked with Sage, FreshBooks, and many other software platforms. Edward’s passion for clarity, accuracy, and innovation is evident in his writing. He is well versed in how to simplify complex technical concepts and turn them into easy-to-understand content for our readers.