Learn to Add Inventory Products in QuickBooks

In any business, inventory plays a part and parcel in any company. Adding products to the inventory is what makes any business run smoothly. It means that your business is growing with inputs and outputs. Once you set up your inventory, it is easy for you to track inventory in your QuickBooks application. Also, you can add products to sales forms.

Tracking your inventory items is an essential task that you must be doing, and using QuickBooks to track them makes your work smooth and effective. In this guide on how to add inventory in QuickBooks, we would like you to walk through this guide to get a better understanding of inventory. 

For your information:

1. Inventory: Inventory is those items that you sell and track quantities for. To let you know, inventory features are only available for QuickBooks Online Plus.
2. Non-inventory: These are items that do not require any tracking, whether you bought or sold them.
3. Services: Services are those facilities that you provide to your clients or customers.
4. Bundle: When you sell some of the products or items as a single product. For example: a mix of toffees in a basket.

Learn how to add inventory products in QuickBooks Online 

Step 1: Turn on inventory tracking. 

• Ensure that you have turned on inventory tracking so you can add inventory items.
• If your inventory is not turned on yet, Turn ON the settings:
• Navigate to Settings and click on Account and Settings.
• Click on the Sales tab and in the Products and services section, click on Edit.
• Turn on the Show Product/Service column on sales forms.
• Turn on both Track quantity and price/rate and Track inventory quantity on hand.
• Click on Save and then hit Done.

Step 2: Add your product’s SKU, name and category.

• Navigate to Settings and click on Products and services.
• Now, add New to add a product or service.
• Click on Inventory and add a Name and SKU specifying what you are tracking.
• Now, you can choose the category from the Category ▼ drop-down.

Step 3: Add your product’s quantity, inventory asset account, and reorder point. 

• Add your products’ Initial quantity on hand. Then enter the date in the As of date field, on which you started tracking that quantity.
• To get alerts when it is time to reorder, add a Reorder point.
• Click on the Inventory asset account and choose Inventory Asset.
• To track the cost of all the products you have in stock, QuickBooks uses this account.

Step 4: Add your product sales, tax, and purchasing info 

• Now, on the sales form, add your product description. This would show invoices, sales receipts, and other forms you send to your clients and customers.
• Click on the Sales price/rate.
• Choose the Income account ▼ drop-down and find the account you use to track what you sell.

Tip:  You have a choice to use an account as an income account that QuickBooks already set up for you. If you are looking for a new account, within the drop-down list, you can scroll to the top and select + Add new.

• If applicable, click on the Inclusive of Tax check box.
• Click on the Tax ▼ drop-down, and you can choose the tax rate that could be used for the item. If you did not find a drop-down, you must set up tax in QuickBooks. 
• Add the product’s Cost. If this changes, do not worry. You can still enter the updated price when you buy supplies.
• From the Expense account, select the Cost of Sales ▼ drop-down. To track the cost of products you sell, QuickBooks uses this account.
• Choose a Preferred Supplier that QuickBooks would remember, so you can easily reorder this product.
• Click on Save and Close.

Change any product’s inventory type.

• If you want to change any product’s inventory type:
• Navigate to Settings and then click on Products and Services.
• Find the items, whether service or non-inventory, that you would like to change.
• In the Action column, click on Edit.
• Click on Change type and select Non-inventory, Service, or Inventory.
• Set the item as a service item, a non-inventory item, or an inventory item.
• Click on Save and close when you are done.

In case you are looking to change multiple items to non-inventory or service items, use Batch actions.

Adjust your inventory items

• Your value of inventory is equal to your stock’s quantity. The Inventory Asset Account is where QuickBooks tracks the value of the inventory. This is a part of your Balance Sheet. 
• Navigate to the Settings and then click on Products and Services.
• Fetch your inventory item and then, in the Action column, click on Edit.
• Select Quantity in the Quantity on hand section next to Adjust.
• Enter 0 in the New Qty column in the Inventory Quantity Adjustment.
• Click on Save and then hit Close.

Since you have no inventory for that item in QuickBooks:

• Click on Settings and then select Chart of Accounts.
• Fetch your Inventory Shrinkage account and click on Run report.
• Search the inventory item that you have just adjusted. Take note of the amount adjusted.

Create a journal entry to account for the adjusted inventory:

• Click on +New or + Create and select Journal Entry.
• From the Account drop-down, click on Opening Balance Equity.
• Enter the amount of the adjustment in the Debit column.
• From the Account drop-down, click on Inventory Shrinkage.
• Enter the same amount of the adjustment in the Credits column.
• Finally, click on Save. 

Conclusion

We hope that you have successfully added your desired inventory products to QuickBooks. Adding your inventory to track it is an essential task. For more information on how to add inventory in QuickBooks, contact our senior QuickBooks ProAdvisor at (866) 500-0076.

Frequently Asked Questions

1. What is inventory in QuickBooks?

Inventory is a stock that is made up of goods and materials your business buys as secondary products and sells as final/finished goods.

2. How can I add inventory in QuickBooks?

If you want to know how to add inventory, follow our guide “Add inventory to QuickBooks” for detailed steps.

3. How to enter an inventory asset in QuickBooks? 

• Log in to your QuickBooks account.
• Click on the Gear icon.
• Choose Products and Services.
• Click on New to add a product or service.
• Choose the Inventory type and share the details like name, description, SKU, cost, sales, price, and more.
• Finally, click on Save and then hit Close to save the product in your inventory list.

4. How to set up inventory in QuickBooks Online?

• Looking to set up your inventory in QuickBooks online mode,
• Navigate to Settings and click on Account and Settings.
• Now, click on Sales and then enable Track inventory.
• Click on Products and Services and then New.
• Enter item details such as name, SKU, cost, and quantity.
• Now, QuickBooks Online will automatically track stock levels.

5. How to set up inventory in QuickBooks Desktop?

• If you are looking to enable inventory tracking in QuickBooks Desktop, click on Edit and then select Preferences.
• Now, click on Items & Inventory, and then check that Inventory and purchase orders must be active.
• Click on the Lists and then select Item List.
• Now, select Inventory Part and enter the item details.
• Item details include cost, quantity, and account for tracking purchases and sales.

6. How to track inventory in QuickBooks Desktop?

• QuickBooks Desktop automatically updates inventory when you record purchases and sales.
• To add stock, click on Purchase orders and invoices.
• To monitor stock levels, click on Reports and select Inventory.
• Now, generate reports such as Inventory Valuation Summary or Stock Status by Item.

7. How to track inventory in QuickBooks?

In both QuickBooks Desktop and QuickBooks Online, inventory is tracked automatically when purchases and sales are recorded. Use Purchase to receive stock and Invoices/Sales Receipts to sell items.

You are required to regularly check inventory reports like the Inventory Valuation Summary to monitor stock levels and avoid shortages.

8. What is the purpose of adding inventory in QuickBooks?

If you are adding inventory in QuickBooks, it would help you in your business to track stock levels, prevent any shortages, and calculate the cost of goods sold (COGS). Doing so ensures accurate financial records, calculates taxes, and streamlines order management. Collectively, this makes business operations smoother and more effective.