QuickBooks can help you keep track of your business products and services
Does your company sell one of a kind products or services? Tracking your inventory may not be an issue if you have the ability to see everything at a glance. However, most businesses don’t have that ability and have the need to keep track their inventory. For accounting purposes, it’s important that a business keeps track of any inventory on hand, as well as any items that were sold.
The majority of businesses sell many different types of products and stock multiple units of each item. These businesses need to know what sells and what doesn’t so they know when it’s time to reorder items. Therefore, these businesses will need to easily be able to add these items to invoices and sales receipts.
Using QuickBooks tools you can create records to record and track your products and services. It works like this:
The first thing you should do is make sure that the QuickBooks site is set up for the intended purpose. Start by clicking on the gear icon in the upper right corner, then click on Your Company | Account and settings. Next, click on the Sales tab and go to the Products and services section, as pictured below.
QuickBooks Account and Settings has a section devoted to Products and services.
Open your options by clicking on Products and services. Here, you can turn any entry from On to Off, by clicking the box at the beginning of the line. If you want to see an explanation of each, just click on the small circled question mark. When your work is done, click Save. To close the window click the X in the upper right corner.
How to Create Records
When you’re ready to enter your product and service data into your records, click the gear icon in the upper right, then select Products and services. The table will be blank since you haven’t entered anything yet. Ultimately, it will contain data for each record you’ve created. You will also notice that there are 2 colored circles at the top of your screen. One is marked Low Stock and the other marked Out of Stock. If you see a number next to either of the colored circles, you will be able to click on either circle and see a list of what stock is low and what stock is out.
When you click New in the upper right corner, a vertical panel will drop down asking what kind of record you would like to create. Your choices will be:
- Inventory - Physical items you sell whose quantity you want to track.
- Non-inventory - Products you buy or sell but whose quantities you don’t need to track.
- Service - Services you sell, like legal representation or landscaping.
- Bundle - A group of products and/or services that are sold together, like computer training and accompanying software.
Now we will create an inventory item, by clicking on Inventory. Next, type the item Name in that field. You may add a photo if you’d like. If the product has been assigned a SKU, enter that in its field. If you would like to, you may divide your products into primary categories and sub-products or services (like Writing Instruments and Pens, Pencils, Markers, etc.).
QuickBooks helps prevent product shortages.
As seen in this image above, in this section, you’ll enter the Initial quantity on hand. This will tell you how many items you have as of the current date. You will also want to set your Reorder point here. This is the remaining number of items that triggers the Low Stock alert so you can replenish your supply.
The Inventory asset account should already be set at Inventory Asset. Here you can enter a brief Description and the product’s Sales price/rate (the price you’ll charge customers) and leave Income account set at Sales of Product Income. Next, select a Sales tax category. If you haven’t set up sales taxes in QuickBooks and need assistance, feel free to contact us.
Enter the description that should appear on purchase forms, in the Purchasing information field, next the Cost (the price you paid to buy the product, if any). The Expense account should be Cost of Goods Sold. Select a Preferred Vendor if you’d like and Save the record.
** Not all fields are required in your product and service records, but it’s strongly recommend you complete each record as thoroughly as is possible.
At Summit CPA, we offer QuickBooks consultation. If you would like further information on how we can assist you with your bookkeeping needs, contact our office at 866-497-9761 to schedule an appointment with our Virtual CFO.