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Carissa22
Level 3

How does QBO categorize non-inventory sales?

I deal with a lot of one-off items that we order for our clients.  I have been adding these as non-inventory items with the expense account Inventory Asset, the same as inventory items, and making them billable to the customer.  Just wondering, when the item is invoiced, will it move the cost of non-inventory items from Inventory Asset to COGS the same as it does with inventory items?

1 Comment 1
LauraAB
QuickBooks Team

How does QBO categorize non-inventory sales?

Hi there Carissa22,

 

I can see from your Community questions today that you're hard at work setting up your products and services in QuickBooks Online. It's awesome to see that this feature may work for you, and making sure you know it's ins and outs of it is a good way to ensure that. I can go over this with you.

 

Since the Non-inventory item set up is designed for items that you wouldn't track otherwise, it doesn't work the same way that an inventory setup would. The non-inventory setup defaults to a sales income account and a purchases expense account for that reason. Even if you choose inventory asset for one of the accounts instead, the program still doesn't kick in to switch it to the COGS account afterward.

 

I can see why you're choosing the non-inventory type since you have one-off items, however, if you're still needing something that tracks as an inventory item would, I recommend setting up Inventory items instead. Here are a couple articles that go over these features.

If these options don't quite work for you, you can also consider manually tracking inventory or a third-party app that may be better suited to the way you'd like to track your items. QuickBooks Online's inventory system offers the basics, so for more robust options, an inventory management app or system would be an asset. The Apps tab is a useful place to find partner applications that can fill in any gaps you need with this process. Use the search field to find what's available.

 

Wishing you the best with this!

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