Hi there userjoe5 and welcome to the QuickBooks Community!
I love that you're looking to take advantage of the Inventory Management feature that comes built into QuickBooks Online Plus subscriptions. This is a fantastic way to track the products that you buy and sell, get alerts when it's time to restock, and keep track of what's on hand. Let me walk you through the set-up process.
The first step of the process is to turn on inventory tracking in your settings. If you're not using QuickBooks Online Plus you won't have the ability to turn this feature on so you'll need to upgrade your subscription first. Here's how to turn on inventory tracking:
- Hit the Gear icon in the upper right then choose Account and settings.
- Pick the Sales tab from the left.
- Look for the Products and services section and use the Edit pencil to make changes.
- Turn on Show Product/Service column on sales forms.
- Also turn on Track quantity and price/rate and Track inventory quantity on hand.
- Make sure to Save and hit Done when you're finished.
You'll want to become familiar with the method that QuickBooks Online uses for handling your inventory: "first in, first out" or FIFO. Essentially this means that QBO considers the first units you purchase to be the first units that you sell. Your assets and Cost of Goods Sold (COGS) account will be adjusted accordingly.
Once you've turned the feature on in your settings you'll be able to start adding inventory products. This is done through the Sales menu from the left. You can navigate to the Products and Services tab and then hit New or Add a product or service. Make sure that you choose an Inventory item so it's tracked properly. When you're ready to record your sales, use the + New button to create a new Invoice or Sales Receipt. QuickBooks will deduct from the inventory that you have on hand by the amount recorded on the transaction.
If you want, you can set reorder points so that QBO can warn you when you're running low. You're also able to run reports that'll show you what's in stock at a given time. Manually reorder your inventory or supplies by creating purchase orders and bills from your suppliers. Make sure you record the payment against these bills as well.
All of the steps that I've explained above can be found in our comprehensive article on inventory management: Set up and track your inventory in QuickBooks Online. Make sure that you check out the hyperlinks I've shared throughout my reply as well for more information and instructions on how best to use this feature.
Take care and let me know if you have further questions!
