Inventory, one of the most vital assets, must be recorded properly in your company file. In this article, you’ll learn how to add inventory in QuickBooks Online. Inventory turnover, which enables businesses to make better decisions on marketing, manufacturing, and pricing, is one of the most important stats. Without proper inventory management, you won’t be able to get the insights to fine-tune your business practices.
How to Add Inventory in QuickBooks Online?
QuickBooks Online is a great solution for inventory management. The myriad options available with good subscription plans provide both features and flexibility to users. Learn how to add inventory in QuickBooks Online.
Step 1- Enable Inventory Management
In QuickBooks, inventory management and tracking aren’t enabled by default. You must have inventory management activated, but even before that, you must have the feature included in your QuickBooks subscription plan. Not all plans of QuickBooks include this feature.
To ensure that Inventory Management is included in your subscription plan, follow the steps provided below:
- Click on the Gear Icon then go to the Account and Settings.
- Select Billing and Subscription then click on View Plan.
For inventory management tools, you must have QuickBooks Plus or above. You can select a new plan to enable inventory management in QuickBooks online.
Step 2- Enable Inventory Tracking
To enable inventory tracking in QuickBooks online, follow the steps provided below:
- Go to Settings, select Account and Settings then choose Sales.
- Go to the Products and Service section.
- Click on Edit.
- Enable the following features:
- Show the Product/Service column in sales forms.
- Track inventory quantity on hand.
- Track Quantity and price/rate
- Hit Save and then Done.
In QuickBooks Online, FIFO (First In, First out) is the only method used for tracking inventory. Online QuickBooks Desktop Premier and Enterprise, the LIFO option isn’t available in the online version of this accounting software.
Step 3- Input Details for Your Items
Every item you create in QuickBooks online must contain necessary information like product name/number, category, and SKU. You can also enter additional information for better organization of your inventory data. Users who manage inventory through Excel, can inventory import the sheet into QuickBooks online and get started ASAP.
To enter essential information like the product’s name, category, and SKU, follow the steps provided below:
- Go to the main menu, and select Sales.
- Click on Product and Services.
- Click on New/Add a product or service.
- Choose Inventory now and enter the necessary information.
- You can also add an HSN code to track the item.
- Click on the Unit drop-down menu to enter the unit for the item.
- From the category list, select the one appropriate for your item.
We recommend that you choose a category for your item as it simplifies the organization of your data. Now, you need to enter the quantity and select an asset account for the item. If this item is vital, then you can add a stock alert. You’ll get an alert if the item quantity is running low.
To enter quantity, select an asset account, and enable stock alert for an item
- In the quantity field, enter the Initial quantity on hand.
- Click on the As of Date field to select the date on which you want to start the tracking of inventory.
- Add a Low Stock Alert.
- From the Inventory Asset Account drop-down list, select the appropriate account for your item.
- Click on Inventory Asset. You can also create a new asset account to track a particular type of item.
By default, most users rely on the inventory asset account to track items in the inventory. However, you have the option to create a special type of customized account to deal with items of a particular type.
To enter purchase, sales, and tax info for a particular product
- Go to the Sales Form.
- Add a description of the Product, which will be displayed on the invoice sent to customers.
- Input a Sales price/rate.
- Click on the Income Account dropdown menu. Select the appropriate account to track the inventory item or add a new account.
- In case applicable, mark the check mark against the option Inclusive of Tax.
- From the Tax dropdown menu, select the appropriate tax rate to be applied to the inventory item. This option won’t be displayed if you haven’t already activated sales tax in QB online.
- Go to Purchase Forms.
- Add a Description of the product, which will be displayed on any bill sent to vendors.
- From the Expense account dropdown menu, choose Cost of Sales, which is used for tracking items that are sold by a company.
- In case applicable, mark the check mark against the option Inclusive of Tax.
- From the purchase tax dropdown, choose the applicable purchase tax or add a new one.
- Add any Reverse Charge related to the item.
- If you have a preferred supplier for an item, then add them. Preferred suppliers can be used for reordering an item repeatedly.
- Click on Save and Close.
Finally, you’ve set up and entered inventory into QuickBooks online and added inventory in QuickBooks POS. You can create bills, checks, or expenses to update the quantity of an item. Bills are used for entering items for which you haven’t yet paid the amount. The amount is reflected in the balance sheet. If you don’t wish the amount to show up on the balance sheet, then create a check or expense. To know more, you can get in touch with our QuickBooks support expert.
