Use reports to see your sales and inventory status

[0:00] If you are using QuickBooks to manage your inventory, then you can order new inventory whenever you are running low. Let's go over how to order and account for new inventory using a purchase order. Then we'll go over what to do when you receive your new inventory. Finally, you'll see how to make adjustments to your inventory if QuickBooks thinks you have more or less than you really do.

[0:24] If you haven't already created inventory products in QuickBooks, you'll need to do that first, and this video here can show you how. To start, navigate to All Apps, and then Inventory in the Inventory menu. You can also find this inventory under the Products and Services menu from the Sales and Get Paid tab. Here you can see which products are low or out of stock.

[0:47] If you see a product you need to reorder, select the arrow next to Edit and Reorder to open a purchase order. If you want to include multiple items on the same purchase order, you can select them all, then under Batch Actions, select Reorder. If you don't have purchase orders turned on, you'll need to do so before continuing. You can do this in the Expenses section in the Account Settings.

[1:10] Select the vendor you want to order from. If you set up a preferred vendor for your product, you'll see one selected already, but you can change it if you need to. The shipping address is your address. But if you do drop shipping and you want your order delivered directly to a customer's address, you can select the customer under Ship To.

[1:32] Fill in Ship Via if there's a specific carrier that you want your vendor to use. Under Item Details, enter all the items you want to order. Enter in the quantity you want to order. Notice that if you hover over this, QuickBooks will show you how much you have on hand and your reorder point. You can adjust the rates and amounts for individual products as needed.

[1:55] You can also add more products to the PO. Just select them from the dropdown menu or add them if you don't see them. You can also add a message to your vendor or add an attachment. Once you're finished, you can save and send to your vendor or select another save option and send it later. Here is the customizable email that QuickBooks will send to your vendor along with the purchase order.

[2:20] If everything looks good, select Send and Close. If you go to the Vendors section under Expenses and Bills, you can see your new purchase order listed here. Once you send it off, your vendor can start processing your order. A purchase order itself does not change your inventory levels. It's just an order with your vendor.

[2:41] When you actually receive your inventory from your vendor, you'll need to record how you paid for it. You can enter it as bill or check depending on how you are paying for the inventory. This is what actually adjusts your inventory quantity and handles all the accounting.

[2:58] If you've received and paid for the inventory already, then you enter a check if you paid by check, or an expense if you paid by any other method. If you haven't paid yet and your vendor has given you a bill with a due date, then enter a bill. These methods are all very similar.

[3:15] For this example, we'll enter a bill, but there are videos with more details on how to record bills, checks, and expenses at the end of this video. Select your vendor. Since you have an open purchase order with them, you'll see it over here. Select Add to add the details of the purchase order to your bill, check, or expense.

[3:36] If the amount of inventory you received or the price you paid for it is different from what was on the purchase order, you can change it here. Once you are finished, select a Save option. Now, if you go back to Product and Services, you'll see that QuickBooks updated the inventory quantity based on your purchase order and the following bill. One final note about managing inventory.

[4:00] If the amount of inventory you actually have on hand is not the same as what's in QuickBooks, you can make an adjustment. Select the arrow next to the product and Adjust quantity. You'll see the product here and the amount QuickBooks thinks you have on hand here. Enter in the number you actually have here, then choose an Inventory adjustment account.

[4:23] This tells QuickBooks where the value of the missing inventory should go. The default is Inventory Shrinkage, but you can create a more descriptive cost of goods sold or expense account for things like theft, spoilage, or charitable contributions if you prefer. This will affect your financial statements, so you should consult your account before doing this.

[4:44] Once you are finished, select Save, and you'll see that QuickBooks has adjusted your inventory. Now you're ready to start managing your inventory with QuickBooks.