linking income and expenses

Welcome to the Community space, @chocolady9. Let me help share information on linking income and expense to your product and services. That way, you can see the profits it's made for your non-inventory items.

In QuickBooks Online, it’s easy to track how much you make and spend on each product or service. To keep track of your sales and spending, you need to set up your non-inventory item and choose the Income and Expense account. 

Here's how:

1. Go to the Sales menu, then select Products & Services.
2. Select New and choose Non-inventory.
3. Enter a Name for the product or service and a SKU, if you track them.
4. From the Category ▼ dropdown, select the category that best describes your product or service. Learn more about item categories.
5. If you sell the item, confirm the checkbox is selected for I sell this product/service to my customers. 
6. In the Description on sales forms field, enter a description. This is what your customers will see on their sales form.
7. Enter an amount in the Sales price/rate field.
8. Select the Income account ▼ dropdown and the account you want to use to track the sale. Tip: You can use an income account QuickBooks already set up for you, or select + Add new to create a new income account. Learn more about adding accounts to your chart of accounts.
9. In the Sales tax section, sales tax is applied by default based on location. 
10. Select I purchase this product/service from a vendor.
11. Add a description. This shows on bills, purchase orders, and other forms you send to vendors.
12. Add the Cost.
13. Select the Expense account ▼ dropdown and then the account you use to track the cost of things you sell.
14. Choose your preferred vendor.
15. When you're done, select Save and Close.

For more details on creating product and services item, you may open this article: Add product and service items to QuickBooks Online.

Once you created the transactions, you'll want to run the Profit and Loss report. This will show how much your business has spent and earned over a specified time. It also shows whether you've made a profit or a loss over that time. Just go to the Reports menu scroll down and choose Profit and Loss Detail report. 

For more information and advice on tracking your inventory in QuickBooks Online, refer to these articles:

• Set up and track your inventory in QuickBooks Online.
• Use reports to see your sales and inventory status.

To sum it up. Linking your revenue and expense will be easier with the inventory items set up. I'm always available if you have any further questions concerning inventory management. Enjoy your day.

Thank you.  I have some transactions that were not put in the correct account to track sales from the beginning of the year.  Is it better to go back and put them in the right account or use a journal entry to move them?

Hello chocolady9o,

Thanks for reaching out to the QuickBooks Community! For a situation like this, it would be best to connect with your accountant to see what is the best fit for your business. If you don't have an accountant, no worries! We offer a ProAdvisor serve where you can link with experts. Many even offer a free consultation! Use this link below to do so:

• QuickBooks ProAdvisors

Let me know if you have questions or concerns! My team and I will do our best to assist! Bye for now

i would like to know that how to tag the cost of sales of each income invoice from customer to know profit & loss of each customer.

I'm glad you can join us here, pankaj1530. I'd be happy to provide some guidance on tracking profit and loss for each customer in QuickBooks Online.

QBO offers a Tag feature. This would allow you to create a unique tag for each customer. Then, run a profit and loss report filtered by each customer tag to see their individual P&L.

Let me share the steps on how you can activate it:

1. Go to the Gear icon and select Tags.
2. Click New and start creating tags for each customer. 

After that, assign each tag in the Tags field when creating sales and expense transactions. 

Check out these articles for more details about using this feature: 

• What Are Tags And Why Should I Use Them?
• Tag Transactions In QuickBooks Online

After assigning tags, you can go to the Reports menu and type in Profit and Loss by Tag Group in the Search bar.

 Additionally, here are some articles and resources on customizing and building reports in QuickBooks Online:

• Customize Reports In QuickBooks Online
• Common Custom Reports In QuickBooks Online

Feel free to visit us again if you have additional questions when using tags, filtering reports, or any other part of the process. I'd be happy to help you again and ensure you can access the information you need, pankaj1530.