I'm trying to set up products that are drop shipped and have reviewed all the community articles but cannot find an answer. Here's hoping someone may be able to help.
1. What product 'type' do I assign to a drop shipped product? Assume this is 'non-inventory'?
2. On import, drop shipped products should be checked as 'Buy' and 'Sell' but not 'Track'
3. Quantity at hand for drop shipped products must be '0'
4. What are the income and expense accounts for drop shipped products?
5. What are the income and expense accounts for stock inventory items?
6. What are the income and expense accounts for products purchased and used as part of a service?
Is the answer to 4,5 and 6:
income = sales of product income
expenses = cost of good sold
thank you for your question. So as to not give you any incorrect information can I just confirm are you using the Quickbooks Online or Quickbooks Desktop product?
Welcome to the community!
In terms of actual drop shipped products,as you know, there is no direct way to choose this type of 'Item' in QuickBooks Pro, or indeed any UK desktop version of QuickBooks. To answer your questions though...
1. The product type would be up to you, but with the implications of point 3 taken into account (Quantity on hand must be 0) this can only be achieved by using a non inventory item setup, otherwise when using a stock item the quantity will be effected by purchases and sales
2. If I understand correctly, non inventory items can be set to 'buy' and 'sell' but not 'Track' (I.E quantity on hand)
3. Non Inventory items with not track Quantity on hand
4 As drop shipped products are not available as a built in feature of Desktop UK, there are no default income and expense accounts.
5. The default stock item income and expense accounts for stock items are indeed income = sales of product income and expenses = cost of good sold
6 For products purchased for use as part of a service, it would depend whether or not you set them up as a stock or non stock item. Stock would be the accounts as above in the answer to point 5, whereas if you set this up as a non stock part and select that it is purchased as part of a service to a customer, then the default sales account will be 'Sales', and the expense account to choose will be left up to the user.
I hope this helps. It's worth mentioning though that for any further assistance on how to categorise items vs your Profit and loss accounts it may be best to speak to an accounting professional. As technical support agents, we can only advise on what QuickBooks does as default.
If you have any further questions, please don't hesitate to post back to this thread.
Thanks very much for taking time to reply. I wonder if I could ask another question regarding stick/non-stock items.
My client has a number of products, some of which can be both dropped shipped or, if inventory is sufficient, can be sold from stock.
How can this be setup in QBO other than creating duplicate products for each, 1 showing as stock item and 1 showing non-stock item?
Not a problem at all.
In either QuickBooks Desktop or online, there is no way to create an item which can be either drop shipped or sometimes not drop shipped and taken from inventory without creating an Item to represent the Drop ship which is non inventory, and and item to track the quantity on hand to use when the stock is sufficient as you say.
I couldn't say for sure, but it may be worth having a look at the desktop apps home page to see if there is any third party software available to integrate with QuickBooks which could help you out.