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Kristy2
Level 2

Entering Inventory for a cleaning business

I am new to QB and my client has a commercial landscaping business.  He is wanting me to enter all inventory, the items are things like equipment they use on a daily basis and machinery.  Not items where they buy then sell them to customers.  It's a services based company.  I am assuming out of the 4 potential inventory services attached in the image, we would be looking at entering them into the Service one, correct?

 

Then are these large items listed as Assets?

What about the smaller ones?

 

 

Solved
Best answer February 10, 2018

Best Answers
WineGuy
Level 5

Entering Inventory for a cleaning business

Hi Kristy.  Tools and machinery are not "inventory" for bookeeping and tax purposes.  They are depreciable assets.  The IRS has quidelines for different assets and if they must be depreciated over years or can be written off as expenses right away.   Service based businesses are selling their services, typically not much in the way of inventory.  Maybe in this case lawn seed or spray  that is tacked on to invoices.  That kind of thing would be inventory that should be tracked so there are beginning and end of year inventory numbers for figuring cost of goods sold.  Hope that helps.

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6 Comments 6
Sangeethmathew
Level 6

Entering Inventory for a cleaning business

Hi Kristy2,

Welcome to the community.

It would be helpful if you could let us know the version and edition of QuickBooks you are using. 

The below link will tell you how to deal with inventory of items you do not sell in QuickBooks Online.

https://community.intuit.com/articles/1670724-track-inventory-items-you-do-not-sell

Let me know if this resolves your issue. 

Kristy2
Level 2

Entering Inventory for a cleaning business

Thank you!  Apologies, it is Quickbooks Online Intuit.

Rustler
Level 15

Entering Inventory for a cleaning business


@Sangeethmathewwrote:

Hi Kristy2,

Welcome to the community.

It would be helpful if you could let us know the version and edition of QuickBooks you are using. 

The below link will tell you how to deal with inventory of items you do not sell in QuickBooks Online.

https://community.intuit.com/articles/1670724-track-inventory-items-you-do-not-sell

Let me know if this resolves your issue. 


That link is for inventory items that are used and not sold, following those directions will reduce the qty on hand.

 

The OP is asking about equipment inventory that is not used up, the qty does not go down.

WineGuy
Level 5

Entering Inventory for a cleaning business

Hi Kristy.  Tools and machinery are not "inventory" for bookeeping and tax purposes.  They are depreciable assets.  The IRS has quidelines for different assets and if they must be depreciated over years or can be written off as expenses right away.   Service based businesses are selling their services, typically not much in the way of inventory.  Maybe in this case lawn seed or spray  that is tacked on to invoices.  That kind of thing would be inventory that should be tracked so there are beginning and end of year inventory numbers for figuring cost of goods sold.  Hope that helps.

View solution in original post

Kristy2
Level 2

Entering Inventory for a cleaning business

Thank you!  This does help me out alot.

 

So do these  larger types depreciating assets need to be put into QB only and not worry about the little items?

WineGuy
Level 5

Entering Inventory for a cleaning business

Hi again Kristy.   Any and all "tools or machinery" should be accounted for in order to expense them.  The useful life of the item is a factor in the # of years it must be depreciated. Smaller ones (under $1000 or so) can typically be 100% depreciated/expensed the same year they are put in service under the section 179 deduction.  Refer to IRS guidlines for how to depreciate the bigger ticket items.  Small items under $100 or so I expense as "supplies."  Deducting all those expenditures properly helps reduce tax liability at the end of the year so it's important.  Cheers!

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