In this article, you’ll learn “how to add inventory in QuickBooks” Desktop, Mac, and Online. Inventory, one of the most vital assets, must be recorded properly in your company file.
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 Items in QuickBooks Desktop
Inventory items are entered as an asset in QuickBooks. Once you enable the inventory management feature, you can add items to the inventory and track them. You can even set up a low stock alert to receive notifications whenever the item is running low. Moreover, the inventory items.
Step 1: Enable Inventory Management
To enable inventory tracking in your company file, follow the steps provided below:
- Click on Edit from the main menu.
- Select Preferences.
- From the left panel, select Items and Inventory.
- From the Company Preferences tab, mark the option ‘Inventory and Purchase Orders are Active.’
- Click on Ok.
Although inventory tracking is available in all versions of QuickBooks Desktop, the Pro version cannot use the FIFO or LIFO methods to track inventory. Instead, it uses the average cost method to ascertain the value of the inventory.
Step 2: Create Item for Tracking
In QuickBooks, you must create an item before you can track it. Complex inventory management isn’t possible with QuickBooks, but if you simply purchase finished products from a vendor, then inventory management will be more than enough for you. In case you use the material for manufacturing a final product, you can enter each purchased item as a sub-part of the main item to simply inventory management.
To create a new inventory item in QuickBooks Desktop, follow the steps provided below:
- From the dashboard, click on Items & Services.
- Click on the Item button, and then New.
- Click on Inventory Part.
- Input essential details like Item Name/Number
- Select an account to track the inventory item by clicking on Income Account.
- Input other essential details related to the inventory item.
- Click Ok.
The inventory item has been added to QuickBooks. Now you can track the current stock of the item and update the quantity whenever you send a purchase order to a vendor.
How to Add Non Inventory items in QuickBooks?
Inventory items are the ones you purchase from a vendor and sell to your customer. These items are usually necessary to track a business. On the other hand, non-inventory items are the ones that you either buy or sell. Most of these items don’t need tracking. Examples of these items include bolts and nuts for machinery.
In case you wish to add noninventory items in QuickBooks, then follow the steps provided below:
- From Items & Services, select Item
- Click on New. The New Item window will appear.
- From the drop-down menu, select Non-Inventory Part.
- Enter Item Name/Number.
- Select the appropriate account you wish to use to track the inventory.
- Enter the rest of the required information. Click Ok.
If you wish to associate checks and bills with the item, then you can convert it to an inventory item type. Most features in the inventory management tool are geared towards inventory items.
How to Add Inventory in QuickBooks for MAC?
Before you can start inventory management for an item, you need to create the particular item in QuickBooks for Mac. Once the item is created, you can edit and update the quantity as you wish. Further, when creating purchase orders or checks, you can use the item to update its quantity.
To create an item in QuickBooks for Mac, follow the steps provided below:
- From the main menu, select Lists.
- Click on Items.
- The Item List window will appear. Click on the Plus + icon.
- Select New Item.
- Choose the type of item you wish to create.
- Fill in the required information for the item. You can use the Custom Fields option to create new fields on the basis of your preferences.
- Click on Save.
You can even change the information you entered for a specific item in QuickBooks. To update or add inventory in QuickBooks for MAC, follow the steps provided below:
- From the Lists menu, click on Items.
- Open the Item for which you want to update information.
- In the Edit Item window, make the updates.
- Click on Ok.
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.
Enable Inventory Management in QuickBooks Online
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.
- Go to Account and Settings.
- Select Billing and Subscription.
- 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.
Enable Inventory Tracking in QuickBooks Online
To enable inventory tracking in QuickBooks online, follow the steps provided below:
- Go to Settings.
- Select Account and Settings.
- Choose Sales.
- Go to the Products and Service section.
- Click on Edit.
- Enable the following features:
- Show 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.
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, follows 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.
- 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, follow the steps provided below:
- 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, follow the steps provided below:
- 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 Consultant expert.