Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
We have been entering all supplier invoices directly to COGS for a year eliminating the need to do a separate journal transaction for every invoice. Our investor has asked us to switch to inventory tracking and COGS tracking. I set up products + services in QBO and started entering all my items with the expense account inventory asset. I do the entire month of February adjusting invoices to ensure everything matches and then I pulled my balance sheet and P+L. I was extremely dissatisfied to see that all purchases ended up in inventory and COGS was reporting nothing.
Someone please help me track inventory/cogs in QBO by using the products and services tab. I cant go on like this.. too many invoices/too little time.
Thank you
Solved! Go to Solution.
Hello korrim21,
I've read through the above posts and hope to be able to shed some light on what's going on here so you can track your inventory items as needed. I hear what you're saying about how making the corrections would cost a lot of time and I want to make sure you're spending less time bookkeeping and more time taking care of business. I'll do what I can to help.
What stuck out to me from your original question is you mentioned that you're using the expense account inventory asset. If you mean to say that you changed the expense account in the Purchasing information section of the item setup to this asset account, that's why the items are not tracking to the COGS account.
With that in mind, it sounds to me like you're setting up your inventory items as service items in QuickBooks. Using QuickBooks Online Plus's built-in inventory item setup, it automatically tracks to the COGS account, like André mentioned, and it cannot be switched to another account type. The Purchasing information section on a service item, however, would allow you to choose the inventory asset account.
QuickBooks relies an account mapping to know when and where to track items that you enter into the books. Since it sounds like you want to record inventory items, I recommend using inventory tracking to do so. That way, you'll be able to accurately hit the inventory asset account, the COGS account, and the sales account.
I'll leave you with a couple of inventory articles for QuickBooks Online so that you can familiarize yourself with how it works.
Luckily, once you have inventory tracking turned on, QuickBooks gives you the option to change a service item to an inventory item. This should save you from having to re-enter everything if you're wanting to change the item type to track inventory. Here's how.
Doing this will not retroactively affect transactions you created previously, so any adjustments that you made before should be okay. Feel free to check in with an accountant or bookkeeper if you're not feeling certain. QuickBooks gives you the tools to connect with one of these professionals by providing the option to add someone you're working with as an accountant user in the My Accountant tab. In that same tab, you can also find an accountant near you with QuickBooks certification that can help. Simply click the Find a pro to help button to begin your search.
In the event that you're not in a position to upgrade to QuickBooks Online Plus if you're using a lower level plan or what's available isn't as in-depth as you need for tracking, I encourage you to consider Fiat Lux's recommendation of a third-party app for managing inventory. You're welcome to check out the one they linked or you can learn what other apps connect with QuickBooks by going to the Apps tab in the left menu and then using keywords to search.
I hope that helps sort this out! Have a great rest of your day. :)
Hey korrim21,
One of the most powerful features of QuickBooks Online is the advanced inventory tracking. This automatically keeps track of your asset and costs, so you can focus on running your business. It sounds like you've been able to set this up so things will be simpler going forward. You're best ally in adjusting what was previously recorded is your accountant. They're a pro, and they can make sure everything is recorded without causing any additional issues. You can easily invite your accountant as a user to approach this together. To search for a pro in your area, simply head to the My Accountant tab in QuickBooks Online then click on Find a pro to help.
Let me know how this goes!
This doesnt seem to be working for me as when sales are recorded it does not automatically do a COGS entry in the background. I am having to manually track and being a service company (plumbing and gas fitting) it's nearly impossible to track each item and expect our employees to do so as well.
I am the bookkeeper and unfamiliar with this function in QBO. Having a very hard time tracking these with this system.
Explore this app for your service business (e.g Plumbing) and integrate it with your QBO. You can track inventory levels of various products in it and have them automatically reduce when they are added to invoices.
https://fieldpulse.grsm.io/quickbooks
Hope it helps.
Hello korrim21,
I've read through the above posts and hope to be able to shed some light on what's going on here so you can track your inventory items as needed. I hear what you're saying about how making the corrections would cost a lot of time and I want to make sure you're spending less time bookkeeping and more time taking care of business. I'll do what I can to help.
What stuck out to me from your original question is you mentioned that you're using the expense account inventory asset. If you mean to say that you changed the expense account in the Purchasing information section of the item setup to this asset account, that's why the items are not tracking to the COGS account.
With that in mind, it sounds to me like you're setting up your inventory items as service items in QuickBooks. Using QuickBooks Online Plus's built-in inventory item setup, it automatically tracks to the COGS account, like André mentioned, and it cannot be switched to another account type. The Purchasing information section on a service item, however, would allow you to choose the inventory asset account.
QuickBooks relies an account mapping to know when and where to track items that you enter into the books. Since it sounds like you want to record inventory items, I recommend using inventory tracking to do so. That way, you'll be able to accurately hit the inventory asset account, the COGS account, and the sales account.
I'll leave you with a couple of inventory articles for QuickBooks Online so that you can familiarize yourself with how it works.
Luckily, once you have inventory tracking turned on, QuickBooks gives you the option to change a service item to an inventory item. This should save you from having to re-enter everything if you're wanting to change the item type to track inventory. Here's how.
Doing this will not retroactively affect transactions you created previously, so any adjustments that you made before should be okay. Feel free to check in with an accountant or bookkeeper if you're not feeling certain. QuickBooks gives you the tools to connect with one of these professionals by providing the option to add someone you're working with as an accountant user in the My Accountant tab. In that same tab, you can also find an accountant near you with QuickBooks certification that can help. Simply click the Find a pro to help button to begin your search.
In the event that you're not in a position to upgrade to QuickBooks Online Plus if you're using a lower level plan or what's available isn't as in-depth as you need for tracking, I encourage you to consider Fiat Lux's recommendation of a third-party app for managing inventory. You're welcome to check out the one they linked or you can learn what other apps connect with QuickBooks by going to the Apps tab in the left menu and then using keywords to search.
I hope that helps sort this out! Have a great rest of your day. :)
Thank you so much that was incredibly informative. My intention is when items are purchased we see them being added to inventory and when items are sold they are removed from inventory and added to COGS.
Will try this re-categorizing with a few buy sell items to make sure it's working for us. I haven't done any adjustments I am having a tough time with Feb ME.
Thanks again!
Korri
I'm glad to hear that information was helpful, Korri. What you describe in the first paragraph is exactly what the inventory system in QuickBooks will do. When you enter an expense transaction that contains items, those will be added to the inventory. When you create sales transactions for items you're selling, the inventory will decrease and hit the COGS account.
Keep me posted with how things go. I'll keep an eye out for further messages from you. :)
Unless you are using projects in which case it does NOT move from inventory to COGS in the project. How do I fix that issue?
Hi sv79,
Thanks for joining us here. Using projects in QuickBooks online is a good way to quickly calculate your project income and costs. I see what you're trying to do within projects but at this moment the feature is designed to help you track profitability. It will only display COGS and not inventory asset. If you'd benefit from additional options in managing projects, feel free to submit feedback directly to our engineers. Your comments are crucial in driving innovation to offer the best QuickBooks experience we can.
Don't hesitate to stop by if you need anything else.
You have clicked a link to a site outside of the QuickBooks or ProFile Communities. By clicking "Continue", you will leave the community and be taken to that site instead.
For more information visit our Security Center or to report suspicious websites you can contact us here