Vendor Invoices with Cost Codes

Thank you for contacting us with your query, Mindy. I understand how important it is to set up your financials correctly, especially as a new company using QuickBooks Online (QBO). Let me assist you with your concern regarding posting vendor invoices with cost codes.

In QBO, when posting vendor invoices that need to reflect in both the COGS account and specific cost codes, it's crucial to correctly set up your Products/Services and Chart of Accounts.

Ensure that every item listed in the Products/Services, associated with the COGS (Cost of Goods Sold) account, also has a specific class or location designated for tracking purposes. This class or location should match your designated cost codes. Consequently, whenever you record an invoice with a particular Product/Service, QuickBooks will automatically document it in the appropriate COGS account and monitor it using the correct cost code via the class or location attribute.

To fix this, check your Products and Services settings and ensure each item is linked to the correct COGS account. Then, activate and use class or location tracking from Account and Settings under the Advanced tab. Assign these classes or locations according to your cost codes.

When creating the vendor bill, select the appropriate Product/Service item and choose the corresponding class or location.

Additionally, you can visit the Intuit Help Hub at https://intuit.me/OHH. It provides personalised support based on your QuickBooks needs.

This brief video guide will help you navigate the platform and address your questions or concerns: https://intuit.me/OHHvideo.

Thank you for your patience and for choosing QuickBooks for your business needs. Please let us know how it goes or if there's anything else we can help with.

Sorry, just to clarify. When you say to make sure each item is linked to the correct COGS account, do you link that in the Expense Account? I've opened up a cost code that we have set up to edit and scrolled down to the purchasing area have set this cost code to my "COGS: Material" account instead of the "Purchases" account that we had previously had it set to. Could you please let me know if that is correct?

So subsequently if I'm using these cost codes for both my material and labor, does that mean that I would have to have two codes set up? One to link to my COGS: Material account and the other for my Labor account? 

I appreciate you getting back here in the thread, Mindy.

You're correct. By doing so, vendor invoices will reflect in your COGS (Cost of Goods Sold) account and fit your current designated cost codes in QuickBooks Online (QBO).Moving up to cost codes used for materials and labor, you'll want to work with an accountant. This way, they can double-check your settings and provide the most appropriate way to handle this situation while tracking these activities accurately.

If you don't have an accountant, I can help you find one. Visit this page and enter the necessary details to find an accountant who works near you: Find a QuickBooks ProAdvisor.

Moreover, here's an article that you can use to track sales and the status of stocks available in your company, as well as modify the report to show more data: Use reports to see your sales and stock status in QuickBooks Online.

I encourage you to utilize the comment section if you have any additional inquiries about vendor invoices or products and services in QuickBooks. I'll make sure to be around to extend a helping hand. Keep safe.