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Track and manage inventory for Commerce in QuickBooks Online

by Intuit Updated 10 months ago

Learn how to track and manage your Inventory from your connected sales channels in QuickBooks Online. 

Note: if you don’t use Commerce, you can still manually track your inventory in QuickBooks Online Plus and Advanced.

Here’s what to expect if you decide to manage your inventory quantities in QuickBooks. Once you've connected a sales channel, we'll import your products,sales orders, and payouts. You can import up to the last 90 days of sales orders from Amazon and eBay, and up to 24 months from Shopify.

We’ll import the following details about your products:

  • Product names
  • Variants
  • SKUs

After this initial import, we’ll continue to sync your sales orders, along with fulfillments and returns, from your sales channels to QuickBooks. New products created after the initial import will only sync into QuickBooks when you receive an order for them. Then, you can match the products to existing ones in QuickBooks or create new ones.

Going forward, you can manage your inventory in QuickBooks by updating inventory levels when you buy more stock, count inventory, or adjust for unplanned shrinkage. We don’t sync this data back to your sales channels.

If you don't want to track inventory for your sales channels in QuickBooks, no problem. Just remember to manually track your inventory and update your inventory asset and cost of goods sold accounts in QuickBooks.

If you change your mind later, you can follow these steps to turn on inventory tracking for sales channels:

  1. Go to Settings ⚙, then select Account and settings.
  2. Select the Sales tab.
  3. Select Edit ✎ in the Products and services section.
  4. Turn on Track inventory quantity on hand.
  5. Turn on Track inventory for sales channels.
  6. Select Save, then select Done.

Understand how inventory is updated between your sales channel and QuickBooks Online

There are only a few actions in your sales channel that will affect your inventory in QuickBooks. The following will affect your inventory:

  • Sales Orders: When a sales order is created, your Quantity on Hand level is reduced.
  • Returns: When a return is processed, that inventory is added back to Quantity on Hand and Available. 

Decreases in Inventory 

  • When inventory is decreased because of product sales, the inventory account is reduced and the COGS account is increased by the number of products sold times the cost per item
  • When your inventory is decreased due to inventory adjustments or counts, inventory is decreased and either COGS or inventory shrinkage or adjustment accounts are increased

Increases in Inventory

  • When inventory is increased due to a purchase order, the inventory value is increased by the number of units times the cost per unit, and the cash balance is decreased by the same amount (or A/P is increased)
  • When inventory is increased due to a return, inventory is increased and COGS is decreased.
  • When inventory is increased due to adjustments or counts, inventory is increased and COGS or inventory shrinkage or adjustment accounts are increased.

Manage inventory items

If you need to make any changes to your inventory, or add a new inventory item, you need to do it in your sales channels as well as QuickBooks. When you get an order for a new item, you will be able to match it from the Product Matching tab.

To add an inventory item:

  1. Go to Settings then select Products & services.
  2. Select New
  3. Fill out the information you need, including the name and quantity details, and the sales and purchasing information. 
  4. Select Save

Once a new inventory item is added, you’ll need to set the initial cost to keep an accurate cost of goods sold and accurately track your profit margins.

To edit an inventory item

  1. Go to Settings then select Products & services.
  2. Find the item you want to edit and select Edit.
  3. Make your changes, then select Save.  

Restock inventory with a purchase order

  1. Go to Settings then select Products & services.
  2. Find and select the product you need to restock.
    Note: QuickBooks will notify you when you have items that are low on or out of stock. Select that notice to quickly filter for those products.
  3. Next, create a purchase order

Adjust quantity

If you have either more or less of an item than QuickBooks shows, you can manually adjust an item's quantity without recording a purchase or sale, to match what you actually have in stock. 

  1. Go to Settings then select Products & services.
  2. Find the  product you need to adjust the quantity for.
  3. Select the Edit dropdown, then select Adjust quantity
    1. To adjust quantity for multiple products, select the products you want to adjust the quantity for, then select Adjust quantity
  4. From the Adjustment Reason dropdown, select the reason for the change in quantity.
  5. For each item, add in the new quantity you counted. 
  6. Select Save

Note: When you save the inventory adjustment, QuickBooks Online automatically records appropriate adjustment account. If you need to add a new stock adjustment reason, or make a change to an existing reason: 

  1. From the Adjustment Reason dropdown, select Add new.
    • To add: Select Create new reason. Then, enter a name for the reason, and which Inventory adjustment account to map it to. Select Save
    • To edit: Select Edit. Then, make any changes you need and select Save. Changes are applied to past transactions.
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