QuickBooks is a software product loaded with useful accounting features. Along with accounting features, this software enables you to keep a track of the inventory. Those of you who are new to QuickBooks inventory tracking, you may be looking for procedures explained in easy language. In this blog, you can go through simply explained procedures and methods to add inventory in QB and set up the inventory in QuickBooks Online and QuickBooks Desktop. What more can you expect from this blog? Here, you can learn to enable the advanced inventory in QuickBooks Desktop Pro.
And for some reason, if you wish to turn off the inventory or advanced inventory, then you can read till the end of this blog.
In this part, you can quickly go through the topics covered in this blog.
Please Note: Prior to adding the inventory, you will be required to go through your subscription. You may be unable to add the investor to QuickBooks in case your subscription has expired. For checking the subscription, first press the Gear icon. Then select “Accounts and Settings“. Click on “Billing and Subscription“. This will help you in seeing your plan. Now, if you wish to upgrade the plan, click on “Plus” and do the needful.
How to Add Inventory in QuickBooks?
Prior to learning how to use QuickBooks to track inventory, you should know how to add it. Certain QB users may not be very clear with the method to add items, services, and products to the inventory. All the help you need for doing has been given here.
This can be done by accessing the Settings and selecting Sales. From the section of Products and Services, you can choose to add a new product or service. The steps that you require for doing the further procedure have been shown below.
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- Begin with turning on inventory tracking.
Please Note: For enabling inventory tracking, you can refer to the section authored above.
- Then click on the “Settings“.
- Open “Sales” and tap on “Products and Services“.
- Click on “New”/”Add a Product or Service“.
- Tap on “Inventory“.
- Enter the “Name“, “HSN Code“, or “SKU” for the item you wish to track.
- From the dropdown of “Unit“, you can enter the unit.
- For specifying a category, press the “Category” dropdown.
Please Note: By setting a “Category“, the services and products can be grouped. This will enable you to easily search them.
- For adding the quantity of products, alert for low stock, and an account for the inventory asset, you can follow this step. Add the quantity of products on hand and enter it while tracking via the field named “As of Date“.
- In “Low Stock Alert“, you can set the alert for reordering.
- Press the dropdown for “Inventory Asset Account“. Then choose “Inventory Asset”.
How to Set up Inventory in QuickBooks Online?
For setting up the QuickBooks inventory tracking, you can visit the Settings, first of all. Then in the Account and Settings, you can opt for clicking on Sales. You can open Edit in the Products and Services section. From there, you can easily set up the inventory and start tracking it.
- Press the “Gear” icon to open the “Settings“.
- Then click on “Account and Settings“.
- Go to “Sales“.
- From the section of “Products and Services“, click on “Edit“.
- Locate the option of “Show Product/Service Column on Sales Forms“. Then turn it on.
- Next, turn on “Track Quantity and Price/Rate“.
- Then turn on “Track Inventory Quantity on Hand“.
- Press “Save“.
- Lastly, press “Done“.
How to Set up Inventory in QuickBooks Desktop?
For the users of QuickBooks Desktop, reading this section is essential. From turning on the inventory to setting it up in QuickBooks Desktop, you will find the complete information here. You can open the Menu and click on Edit. From the Preferences, you can click on Items & Inventory. In the Company Preferences, you can select Inventory as well as the Purchase Orders. Once these have been set as active, you can press Ok.
As you read ahead, the remaining steps will be uncovered.
- Start “QuickBooks Desktop” and open the “Menu“.
- Tap “Edit“.
- Pick “Preferences“.
- Choose “Items & Inventory“.
- Open the tab named “Company Preferences”.
- Tick “Inventory” as well as “Purchase Orders” for activating.
- Then press “Ok“.
- After receiving the warning message “QuickBooks Must Close All its Open Windows to Change this Preference“, press “Ok“.
- For adding the items to the inventory, open the “Home Page” of QuickBooks.
- Click on the icon of “Items & Services“.
- In “Item List“, select “Item and press “New“.
- From the dropdown of “Type“, select the “Inventory Part“.
- In the “Type” window, enter the following information.
(i) Enter “Item Name” or “Number“.
(ii) Ensure “Unit of Measure” is left blank, except if you are a user of QuickBooks Premier or an above version.
(iii) Type “Purchase Information“.
(iv) Provide “Sales Information“.
(v) The “Cost of Goods Sold” account will be auto-detected by QB. Then in “Income Account“, provide the income account for tracking the income from the item. - After all the above-required information has been correctly filled in, you can press “Ok“.
Now, this method is complete. We hope you found no complex issues in learning how to set up the inventory in QuickBooks Desktop.
How to Enable Advanced Inventory in QuickBooks?
The users of QuickBooks Desktop Enterprise get the option of subscribing to or purchasing the Advanced Inventory. If you too have access to this feature, you can enable it from the Edit menu. Heading on to the Preferences, you can turn on the option of Inventory and Purchase Orders are Active. Lastly, you can hit the button for the Advanced Inventory Settings.
- Begin with opening the “Edit” menu.
- Now, you have to choose the “Preferences” option.
- From the left, click on “Inventory and Purchase Orders are Active” to select it.
- Press the button for the “Advanced Inventory Settings“.
Please Note: In case the button for the “Advanced Inventory Settings” seems to be grayed out despite buying the feature, you can prefer syncing the license data online to enable QuickBooks for recognizing it. To do so, please follow the steps shown below.
- Open “Help” in QuickBooks.
- Click on “Manage My License“.
- Now, tap on “Sync License Data Online“.
- Ensure that the “Advanced Inventory Settings” is not grayed out any longer.
- Close “QuickBooks“.
- Then open “QuickBooks” again.
Once the Advanced Inventory has been enabled, you can go ahead with QuickBooks inventory tracking.
How to Adjust Inventory in QuickBooks Desktop Pro?
Let us now move on to learn how the inventory can be adjusted in QuickBooks Desktop Pro. This can be initiated by checking the Menu Bar for the option of opening the Adjust Quantity window. In this window, you can pick the Adjustment Type. You can also adjust the Total Value and Quantity. In the option of Adjustment account, you can fill in the date of the adjustment. Thereafter, you can add the Reference Number.
For learning the exact steps, Let’s read these 14 steps.
- The “Menu Bar” carries the option of “Vendors| Inventory Activities| Adjust Quantity/Value on Hand“. Select it.
- The window of “Adjust Quantity/Value on Hand” will open. Click on the dropdown for “Adjustment Type” for choosing the kind of inventory adjustment that has to be made.
- The “Quantity” and “Total Value” can be adjusted now.
- Provide the adjustment date in the field of “Adjustment Account“.
- Click on the dropdown menu for “Adjustment Account“.
- In the field of “Reference No.” on the right, provide the reference number of the adjustment.
- In case required, you can enter the “Class” or “Customer Job“.
- In the “Memo” field, please specify the reason for which the QuickBooks inventory has to be adjusted.
- In the first row, choose the column of “Item“.
- Using the dropdown list, choose the first item for adjusting.
- For making an adjustment of quantity, enter the “New Quantity“/”Quantity Difference” in the column.
- In the column of “Quantity Difference“, for mentioning the loss of the items, enter a negative number.
- In the column of “New Value“, the new value of the total can be added in case the adjustment has to be made on the total value.
- After the inventory has been adjusted, click on “Save & Close“.
How to Turn off Inventory Tracking in QuickBooks?
For any reason, you may wish to disable the inventory tracking in QuickBooks. Turning it off has been explained very well in this part. You can, firstly, visit the Settings and then choose the Account and Settings. From Sales, you can open the Purchase and Services. Next, you can deselect Track Inventory Quantity on Hand and save it.
Please Note: When the inventory tracking has been turned off, the transactions including the purchases and sales which are linked to the inventory items will not be able to affect the on-hand quantity.
- Press the “Gear” icon.
- The second step is to click on “Account and Settings“.
- Now, open the “Sales” tab.
- Then visit the section of “Purchase and Services“.
- Locate the checkbox for “Track Inventory Quantity on Hand“. Then untick the box for it.
- Press the “Save” option.
- Then click on “Done“.
Please Note: After above steps have been performed, you can track the price/rate and quantity even now, if you wish to do so. All you have to do is ensure that the box for “Track Quantity and Price/Rate” has been ticked.
How to Turn off Advanced Inventory in QuickBooks?
Each one of you who has opted for the Advanced Inventory feature in QuickBooks, you can turn it off with ease. From the Edit menu, you can pick Preferences. Then you can select the Items & Inventory. From the Company Preferences, you can hit the Advanced Inventory Settings button. Then you can deselect several options as per your preference. And you will be able to turn off the Advanced Inventory in QuickBooks.
- The basic step is to click on the “Edit” menu.
- Now, pick the “Preferences” option.
- The third step is to click on “Items & Inventory“.
- Then open the tab of “Company Preferences“.
- Press the button for “Advanced Inventory Settings“.
- Untick “Multiple Location Inventory“.
- From the “Serial”/”Lot Numbers” tab, you can untick “Enable Lot or Serial Numbers“.
- In the “FIFO” tab, you can untick the “Enable Barcode Scanning“.
Please Note: When the barcode scanning option has been turned off, the QuickBooks software can still retain each of the barcodes in the company file. On the other hand, if you enable this option once again, the barcodes will appear again in the company file.
- Open the window of “Advanced Inventory Settings“.
- Then press “Ok“.
- Press “Ok” in the “Preferences” window.
- When a warning window is seen, press “Ok” once again.
Please Note: For starting the QuickBooks Inventory tracking once again, you can enable the option to do so.
Frequently Asked Questions
In each of the sections above, we attempted our best to give you every piece of information with respect to QuickBooks inventory tracking. In case you still have certain unanswered questions, you can read below.
The QBDT versions of this software come with the option of QuickBooks inventory tracking. In case you happen to be a user of QuickBooks Desktop Enterprise, then you will have to get access to the Advanced Inventory and Advanced Pricing features. These features are subscription-based. Using them, you can get help for tracking the inventory in QuickBooks.
After you have set up the inventory products, you can track what is being sold. For this purpose, you can either make an invoice or opt for adding a cash memo. In case the payment will be received later, you can make an invoice. If the customer has already submitted the payment on the spot, then you can enter a cash memo.
Learning how to categorize inventory in QuickBooks is not complex at all. For categorizing the inventory in QuickBooks, you can go to the Sales menu and choose the services and products. Then you can pick the service or product that has to be categorized. From the column of Action, you can click on edit and then you will find the Category dropdown. After selecting the Category, you can press Save & Close.
Using the QuickBooks software, you can perform a short procedure to set up your inventory on it. Once the inventory has been turned on and the setting up is complete, you can start tracking it.
On the balance sheet, the inventory gets tracked like an asset. For as long as the inventory items are not sold, their cost will not be recorded. On the other hand, the non-inventory items are tracked as Cost of Goods Sold. These items get recorded on the statement of profit and loss when they have been purchased.
In QuickBooks, the inventory part refers to the type of an item. The inventory part can be found in Lists. Here, you can click on the Item List menu. The basic purpose of the inventory part is to show an item which is kept by your firm on hand for selling to the customers.
In Closing
QuickBooks inventory tracking requires you to perform several methods for going ahead with this purpose. From adding the inventory to turning it off, each crucial method was outlined in this blog. Should you need more help with Inventory tracking on QuickBooks, please convey it to us via the comment section.
Meanwhile, here are more important blogs you should prefer reading for your improved knowledge of QuickBooks. Check out how to add an account to QuickBooks in just a tap.