Accounting for expenses in QBO from the client website

Hi there, @Jeffery2020.

In QuickBooks, you can set up an inventory and add items/fragrances. Then, create an invoice or sales receipt and use the item. In that way, QuickBooks will track your Sales and Cost of Good Sold.

You can follow these steps on how to set up inventory:

1. Go to the Gear icon.
2. Select Account and Settings, then go to Sales.
3. Click the Edit icon in the Products and Services section.
4. Turn on Show Product/Service column on sales forms.
5. If you want to set up flexible pricing for the things you sell, you can turn on price rules.
6. Turn on both Track quantity and price/rate and Track inventory on hand.
7. Click Save, then hit the Done button.

For more steps, please refer to this link and follow the on-screen instruction: Set up and track your inventory in QuickBooks Online.

Once done, you can add the inventory items so that QuickBooks can track the Sales and Cost of Good Sold using these items.

Also, QuickBooks uses the FIFO instead of average costing, since FIFO is a concept used by businesses that track inventory. For more detailed information about FIFO, you can read this link: What is FIFO and how is it used for inventory cost accounting.

You may also use this article in case you want to use our Advance Inventory feature that can help you track inventory stored at different sites or locations: Set up Advanced Inventory.

Please know that I'm always around here in the Community to help. Keepsafe, and have a good day.

Please tell me how the bank feed to QBO from the website, which have purchases from credit card as Sales.  

How do we split the purchases as sales and COGS in QBO automatically? I think the process will be manual for this issue.

Also, the client doesn’t want to track inventory because she doesn't keep inventory on hand. The client fulfill the order after the customer purchase the fragrance on website.

However, the client can use an OBO app that would allow the client to split the purchase for sales and COGS and upload to QBO.

COGS.

I was wondering is there an app?

Thanks for getting back to us, Jeffery2020.

When setting up an item in QuickBooks Online, we have two sections; the Sales information and the Purchasing information section.

With the steps provided by Rejeil_O on how to edit an item, we can set the income account and the COGS. I'll share again the steps so it would be clearer for you.

1. Click Sales on the left menu and go to the Products and Services tab.
2. Look for an item you want to update and click Edit.
3. In the Income account field, you can select Sales if you have already set up this account.
4. Go to the Purchasing information section and mark the I purchase this product/service from a vendor box.
5. From there, you can enter COGS in the Expense account field.
6. Click Save and close.
   Note: If this item was already used on previous transactions, you can mark the Also update this account in historical transactions box.

These will be the affected accounts when you use the item on the transactions.

For example, we use the item on an invoice. Then, the customer payment reflected in the Banking page.

We can match the bank transaction to the invoice so you don't need to select the category manually. Matching will also help you get an accurate data on your sales reports since it won't cause duplicates. You can use this link on how you can categorize your bank transactions: Categorize and match online bank transactions in QuickBooks Online.

Meanwhile, your client doesn't need to track inventory for them to set up the items for Sales and COGS. The Purchasing information function is available in QuickBooks Online Essentials, Plus, and Advanced subscriptions.

Regarding with the third-party app that your client is using, we'd recommend reaching out to the OBO app support team. They can give you more information on how their app can integrate with QuickBooks Online. In addition to that, they can also verify if their program can be accessed through a mobile/computer app or URL.

If you have additional questions regarding on how the program works, please let us know. We'll be right here to keep you informed with this matter. Have a great day!

---

@Jeffery2020 wrote:

Also, the client doesn’t want to track inventory because she doesn't keep inventory on hand. The client fulfill the order after the customer purchase the fragrance on website.

@Jeffery2020 

How do your client fulfill the order? Do they back order to supplier(s) or manufacture it in-house?