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Intuit

How to change Product and Service types

Product and service items help you to identify and classify the items and services you sell, and enable you to track your inventory.

Note: Inventory tracking is only available in QuickBooks Online Plus.

The following sections provide information and guidance about Product and Service types.

4 Product and Service types

You can create four different item types in the Products and Services list:

  • Inventory items: Items you buy or sell and track quantities for. You must turn on the Tracking Quantity on Hand option to track Inventory items.
  • Non-inventory items: Items you buy or sell but either can't or don't need to track quantities (for example, the nuts and bolts used in an installation).
  • Services: Services you provide to customers, such as landscaping or tutoring.
  • Bundle: A collection of products or services you sell together, such as a gift basket of fruit, cheese, and wine. When you set up Bundle items, you can specify whether to hide or display the components when printing or sending transactions.
Note Bundle items can only be created and used in the browser version of QuickBooks Online, and are not supported on Android or iOS mobile apps at this time.

You can change the type of some items, if necessary.

Which Product and Service types can I change?

You can change Service and Non-inventory products and services from one item type to another, although you cannot change Bundle and Inventory items because of the way these types are tracked.

Inventory items cannot be converted to any other type. If you need to change an Inventory item to a different type, you’ll have to create a new item.

The following item type changes are supported:

  • You can change Non-inventory and Service items to Inventory items, but you must do it one at a time, not in batch
  • You can change Non-inventory items to Service items both singly and in batch
  • You can change Service items to Non-inventory items both singly and in batch

Change individual item types

You can edit an individual Service or Non-inventory item to change its type.

This is the only way to change a Non-inventory or Service item to an Inventory item.

To edit individual item types:

  1. Select the Gear icon on the Toolbar.

  2. Under Lists, select Products and Services.

  3. Locate the item to edit.
    The item must be either a Service or Non-inventory item.
  4. From the Action column drop-down menu, select Edit.

  5. In the Product/Service information panel, select the Change type link, and select Inventory.
  6. Enter the Initial quantity on hand and As of date for the item in the appropriate fields.
    The As of date must be earlier than the date of any transactions that use this item.
  7. Select Inventory asset from the Inventory asset account drop-down list.
  8. In the Sales information section, enter the Sales price/rate for the item and select the appropriate Income account from the drop-down list.
  9. In the Purchasing information section, enter the Cost of the item to you and select the appropriate Expense account from the drop-down list.
  10. Select Save and close.

The selected item is changed into an Inventory item, and quantities will be tracked for this item.

Change multiple items at once

You can use the Batch feature to change multiple Service items to Non-inventory items or Non-inventory items to Service items.

You can't use the Batch feature to change an item to an Inventory item, as you must enter specific quantity, price, cost, and account information for each inventory item.

To change the type of items using the Batch feature:

  1. Select the Gear icon on the Toolbar.

  2. Under Lists, select Products and Services.

  3. Select the checkbox for each of the Service or Non-inventory items to change.
  4. Select Make non-inventory or Make service, as appropriate, from the Batch actions drop-down list.

All of the selected items are changed as you specified.

Change Inventory items

By default, Inventory items track quantities on hand. These items are tied to an Inventory Asset account, and when you track quantity on hand for an item, values for that item are created and tracked on your company's Balance Sheet.

You can't simply turn this tracking off to change Inventory items into Non-inventory or Service items because turning off inventory tracking on an item doesn't make the value for that item go away on your company financial reports. That value must be accounted for.

To change an Inventory item with a quantity on hand into a Non-inventory item, you must either sell all of the inventory you have on hand, or you can adjust the item so that it shows zero quantity on hand before inactivating the item to ensure that the Inventory Asset account has a zero value for that item.

To adjust the item to show zero quantity, you must:

  1. Adjust the item so it has zero quantity on hand.
  2. Find the total value of the quantity adjustment in the Inventory Shrinkage account.
  3. Create a journal entry debiting Opening Balance Equity and crediting Inventory Shrinkage.

The following sections provide the detailed steps involved in each of these processes.

Once adjusted, you can create a new Non-inventory item for the item. The new item can have the same name as the previous Inventory item, although it will be a different item with its own history.

Tip:  If you entered a quantity on hand for an item you didn't intend to track, you can follow the steps in these sections to correct the error and remove that quantity.

Adjust an item

To adjust the item so it reflects zero quantity on hand:

  1. Select the Gear icon on the Toolbar.

  2. Under Lists, select Products and Services.

  3. Locate the item to update.
  4. From the Action column drop-down menu, select Edit.

  5. In the Product/Service information panel, in the Quantity on hand section, next to Adjust, select the Quantity link.
  6. In the Inventory Quantity Adjustment window New Qty column, enter 0.
  7. Select Save and Close.

The quantity is adjusted to zero. The next step is to take note of the total value of the adjusted items.

Identify the total value of the adjusted items

To find the total value of the quantity adjustment in the Inventory Shrinkage account:

  1. Select the Gear icon on the Toolbar.

  2. Under Your Company, select Chart of Accounts.

  3. In the Chart of Accounts. locate the Inventory Shrinkage account.
  4. From the Action column drop-down menu, select Run Report.

  5. Note the value of the adjustment in the Amount column for the item on the report.

With this value noted, the next step is to create a journal entry to account for this value.

Create a journal entry for the value

To create a journal entry debiting Opening Balance Equity and crediting Inventory Shrinkage:

  1. Select the Plus icon (+) on the Toolbar.

  2. Under Other, select Journal Entry.

  3. On the first line, select Opening Balance Equity from the drop-down list in the Account column.
  4. In the Debit column, enter the previously-noted value for the adjustment.
  5. On the next line, select Inventory Shrinkage from the drop-down list in the Account column.
  6. Enter the previously-noted value for the adjustment in the Credits column.
  7. Select Save.

You can now create a Non-inventory item for this product or service.