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Using QuickBooks’ Item List: The Basics

While QuickBooks Pro and Premier don’t have full-blown inventory management, you can still create and track item records.

If your company sells services only, your “inventory” is only limited by the amount of time your staff has to offer. But product-based businesses that want to avoid having too much or too little stock on hand need to keep a close watch on their inventory levels. QuickBooks lets you do this.

First, though, you need to have created detailed item records. A QuickBooks training course will go into this step in depth, but here’s an overview.

Using the menu

To get started, open the Lists menu and select Item List, or click Items & Services on the home page. QuickBooks opens a window containing an item register. As you build your records, they will appear here.

Click the arrow next to Item in the lower left corner. This menu appears:

The Item List menu

To create an item record, click New. The New Item window opens. Use care when you’re filling this out; accuracy is critical here.

QuickBooks lets you assign everything you sell to a Type, which is the label above the first field. You’ll open the list and choose one. There are several, including:

  • Service
  • Inventory Part
  • Inventory Assembly
  • Non-Inventory Part
  • Other Charge

There are other options here that don’t specifically relate to product and service descriptions, like Sales Tax Item and Discount.

Building your records

This is an example of what a completed item record looks like:

An item record in QuickBooks

Once you’ve specified a type, you’ll enter the item’s name or number and the manufacturer’s part number. If it is one of multiple items in a larger category, you’ll check the box next to Subitem of and select the parent from the drop-down list.

Unit of Measure is only available in certain versions of QuickBooks, so if you can’t enable it in yours, indicate in the Purchase Information and Sales Information fields whether this item is a single entity or a can, box, carton, etc. Select a Preferred Vendor if you’d like.

Enter your Cost (what you pay to purchase it) and Sales Price (what your customers pay you).

Assigning accounts is a bit trickier; you can learn more about these options in a QuickBooks class. QuickBooks is smart enough to automatically select default accounts that will probably work for you. For the Asset Account, for example, it has chosen your Inventory Asset account, since this is an inventory part.

A delicate balance

QuickBooks can keep an eye on your inventory level if you need it to. You’ll want some advance warning, so based on how quickly you sell specific items, enter a Reorder Point, and QuickBooks will alert you when it’s time. You want to order in enough time that you don’t run out, but you don’t want to sit on a lot of excess.

QuickBooks also tracks how many you have On Hand, what your Average Cost is, and how many have been committed on purchase orders and sales orders.

Once you’ve created item records for your entire inventory, you’ll be able to learn quickly what the status is in real time by running reports like this:

A QuickBooks inventory report

If you need anything more sophisticated than what Pro and Premier offer in this area, you might consider upgrading to QuickBooks Enterprise Solutions or adding Fishbowl Inventory. But what’s offered at this level may be just enough for you.

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