In our last post we reviewed inventory setup capabilities in QuickBooks Online (QBO), and compared that to QuickBooks Pro, the desktop version.
Today, let’s look at some of the other inventory related activities.
In QBO, the list for Products and Services shows quite a bit of information about our sellable items.
Note that, starting from the left side, various columns exist to hold the data we could add about these items that we sell.
A picture can be added for each item. That would show in the left column.
The next several columns hold item information for SKU, type (product or service), description, and the account to which sales of this item will post.
The sales price, as well as the cost are displayed here. So is whether or not the product or service is taxable, and for items we track as inventory, the quantity we have on hand.
In the right-hand column is a drop down arrow that reveals a list of three options. The edit option is showing now.
Besides edit, we can ask QBO to run a report on the activity for a particular product or service.
The report is grouped by account, and shows the transactions that included this item, Rock Fountain.
In the quantity column you can see the increases from purchases and decreases from sales.
Purchasing items to increase our quantity on hand is very straightforward. When creating the check or bill, just use the item section rather than the account section.
Selling the item is usually the easier transaction to get right. You have to have an item to create a sales receipt or invoice. Just use the right one.
Another transaction we create with inventory from time to time, is an adjustment. One breaks. We find the quantity in stock doesn’t match what we show in QuickBooks. There can be several reasons we would need to do this.
In QBO, this is accomplished from the list of products and services. Navigate there by selecting the settings (gear) icon and choosing Lists, Products and Services. Find the appropriate product.
Choose to Edit the product. Next to the “Current quantity on hand”, click Update.
Enter the as of date and New quantity on hand.
Once the Save and Close button is selected, QBO adjusts the quantity and posts an entry to account for the cost of losing one inventory item.
QBO uses the cost of goods sold type of account named Inventory Shrinkage to record the cost.
In desktop versions of QuickBooks, the buying and selling procedures pretty much mirror QBO. The screens look different, but the functions are the same.
A major difference though, is the way inventory adjustments are entered into the software.
In QuickBooks Pro, navigate to Vendors->Inventory Activities->Adjust Quantity/Value on Hand.
The features in QuickBooks Pro are a little more robust. Here is the equivalent of the adjustment we made in QBO.
The top arrow shows we are making a quantity adjustment. It is possible in QuickBooks Pro to change the system’s cost of certain inventory items as well.
The second arrow points to the expense or cost of goods sold account used to post the cost of the adjustment. This account can be specified by the user in QuickBooks Pro.
The third arrow highlights the line in the body of the transaction window changing the quantity. Several items can be listed and adjusted in one transaction.
Another difference we will find between QBO and QuickBooks Pro are the reports that supply us with data on our inventory. We will look at those next time.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330