Product inventory decisions can be a guessing game for business owners. Too much inventory is costly in terms of the capital it ties up, and too little can be just as costly if customers go elsewhere to make purchases. Every product-oriented business should pay close attention to inventory management. Using QuickBooks Pro to track inventory can provide ways for business owners to keep accurate and up-to-date records detailing quantities, cost and resale revenue. Tracking inventory in QuickBooks Pro also allows business owners to set reorder reminders and create purchase orders when inventory reaches the specified reorder point.
Add and update vendor information. Add any vendors not already in your vendor list by selecting “New Vendor” from the “Vendors” tab on the QuickBooks Pro main menu. In the “New Vendor” window, add vendor contact information in the “Address Info” tab, and your account number and credit line information in the “Additional Information” tab. Update information for current vendors if necessary.
Turn on inventory tracking, and set inventory preferences. If you have not previously been tracking inventory, this feature may not be active as it is not a default setting in QuickBooks Pro. Select “Preferences” from the “Edit” tab of the QuickBooks Pro main menu, and then select “Items & Inventory” from the list at the left side of the “Preferences” window. Select the “Company Preferences” tab, and place a checkmark in the first box to turn on inventory tracking. Set options for reorder reminders and duplicate purchase order warnings.
Create inventory items. Create a record to describe each item you will enter into inventory, and link it to the appropriate income account. Select “Lists” from the QuickBooks Pro main menu, then select “Item List” and press the “Item-New” button at the bottom left of the screen to open the “New Item” window. Add information about the inventory item as follows:
Type: “Inventory Part” Reorder information: item name/number and the manufacturer’s part number Purchase information: wholesale cost, preferred vendor and a description of the item that will appear on purchase orders Sales information: retail sales price, the income account you will use for tracking, such as Sales, and a description that will appear on sales receipts Inventory information: leave this section blank as it will auto-update when you enter the item into inventory
Enter inventory items. This is where you create and begin tracking inventory. Select “Receive Items” from the “Vendor Center” tab on the QuickBooks main menu to enter inventory items you have already paid for, such as historical data for inventory items on hand as of the date you start tracking inventory in QuickBooks Pro. Select the inventory item from the “Item” drop-down box, and fill in the quantity. The remaining fields, including description, cost and amount, will auto-fill for you.
If you are entering items into inventory that require payment, select “Receive items and enter bill.” Select the inventory item from “Item” drop-down box, and enter a quantity. The remaining fields include vendor, payment terms, amount, due date and inventory item information will auto-fill.
When you turn on inventory tracking, QuickBooks Pro adds three new accounts to your Chart of Accounts: Inventory Asset, Cost of Goods Sold and Inventory Adjustment.
To ensure accuracy, it is a good idea to conduct a physical inventory before entering items into inventory.
QuickBooks Pro has an “Inventory Adjustment” window to use when adjusting for differences in physical inventory counts. Do not use this window to record new inventory.