Learn how to add your inventory products in QuickBooks Online Plus and Advanced.
Add everything you buy and sell in your inventory into QuickBooks. Then, let QuickBooks update the quantity on hand as you work so you don't have to. Once you're set up, it's easy to track inventory in QuickBooks and add products to sales forms.
If you buy and sell products and services but don't track them as part of your inventory, here's how to add them to QuickBooks.
In this article, you'll learn how to:
- Understand product and service types
- Turn on inventory tracking
- Add your product’s name, SKU, and category
- Add your product’s quantity, reorder point, and inventory asset account
- Add your product’s sales, tax, and purchasing info
- Change a non-inventory product to inventory
Understand product and service types
- Inventory: Products you sell and track quantities for. Inventory features are available for QuickBooks Online Plus and Advanced. Here's how to turn on and use inventory features.
- Non-inventory: Products or items you buy or sell, but don't need to track quantities for. For example, nuts and bolts you use for installation jobs but don't sell directly.
- Service: Services you provide to customers.
- Bundle: Several products or services you sell together as a single item. For example, a gift basket.
Step 1: Turn on inventory tracking
Make sure to turn on inventory tracking so you can add inventory items.
Step 2: Add your product’s name, SKU, and category
Once settings are in order, here’s how to add your inventory products.
Tip: Already keeping track of your products in a spreadsheet? Save time and import all of them at once instead.
- Go to Settings ⚙ and select Products & services (Take me there).
- Select New to add a product or service. Then select Inventory.
- Add a Name* and SKU for what you're tracking.
- Select the category from the Category ▼ dropdown. Tip: Categories let you group your products and services together so they’re easier to find.
Step 3: Add your product’s quantity, reorder point, and inventory asset account
- Add your product’s Initial quantity on hand. Then enter when you started tracking that quantity in the As of date field.
Note: If you’re new to QuickBooks, initial quantity on hand depends on what date you plan to start tracking your business. For example, if you’ll start tracking from the beginning of your fiscal year, enter your products’ quantities at that time.
But if you’re simply adding a new product from a supplier, enter “0” as its initial quantity. Then, after saving, track how many of this product you receive from suppliers. This ensures you don’t double its initial quantity.
- Add a Reorder point to get alerts when it's time to reorder.
- Select the Inventory asset account ▼ dropdown and select Inventory Asset. QuickBooks uses this account to track the cost of all the products you have in stock (or inventory value).
Step 4: Add your product’s sales, tax, and purchasing info
- Add your product’s description on sales forms. This shows on invoices, sales receipts, and other forms you send to customers.
- Add the Sales price/rate.
- Select the Income account ▼ dropdown and find the account you use to track what you sell.
- Select the Inclusive of sales tax check box, if applicable.
- Select the Sales Tax▼ dropdown and choose the tax rate to be used for the item. If you don’t see this dropdown, set up sales tax in QuickBooks.
- Add your product’s description on purchase forms. This will show on bills, purchase orders, and other forms you send to suppliers.
- Add the product’s Cost. If this changes, don’t worry. You can still enter the updated price when you buy supplies.
- From the Expense account ▼ dropdown, select Cost of Goods Sold. QuickBooks uses this account to track the cost of products you sell.
- Select the Inclusive of purchase tax check box, if applicable.
- From the Purchase tax ▼ dropdown, select the applicable purchase tax.
- Select a Preferred Supplier. QuickBooks remembers your preferred supplier so you can reorder this product easily.
- Select Save and close.
As you start selling new products, you can use the same steps to set them up.
Note on Inventory Reports: When Inventory is added to QBO without a Bill associated, it is assumed that inventory items have already been to the Cost of Goods Sold account prior to the customer using QBO.
Whenever Inventory needs to be added to QBO, and the customer wants to assign a Cost of Goods Sold Value to the Inventory items, a Bill will need to be created for the inventory items, and backdated if necessary.
Any Inventory items that don’t have Bills associated with them, will be assigned a zero dollar value for Cost of Goods Sold.
Change a non-inventory product to inventory
Need to start tracking supply of a product you set up as non-inventory? Change its type to inventory instead of creating a new item.