Set up Advanced Inventory in QuickBooks Enterprise

Learn how to set up Advanced Inventory in QuickBooks Enterprise.

Turn on Advanced Inventory to track inventory stored at different sites or locations. Set up Advanced Inventory and make sure your inventory by site is accurate. Here’s how.

In this article, you'll learn how to:

• Set up multiple inventory sites
• Set up inventory sites
• Convert from your previous method of tracking inventory sites
• Set reorder points for each site
• Transfer opening quantities of items to each site

Step 1: Set up multiple inventory sites

Set up multiple inventory sites in QuickBooks Enterprise when you turn on Advanced Inventory.

1. Go to File, then select Switch to Single-user Mode.
2. Select Edit, then Preferences.
3. Select Items & Inventory, then Company Preferences.
4. Check the Inventory and purchase orders are active checkbox.
5. Select Advanced Inventory Settings, then select the Multiple Inventory Sites is enabled checkbox.
6. Select OK.

Step 2: Set up inventory sites

Tell QuickBooks Desktop where you track inventory. These locations are called sites. Sites are warehouses, trucks, piles, staging areas, or any location where you track inventory.

1. Go to Lists, then select Inventory Site List.
2. Select Inventory Site, then select New.
3. Enter the appropriate information.
4. Repeat Steps 1 to 3 until all your sites are set up.

Continue to Step 3 if you’re changing how you track multiple inventory sites. Proceed to Step 4 if you need to set reorder points for each site. Otherwise, skip to Step 5.

Step 3: Convert from your previous method of tracking inventory sites

If you use a different way to track multiple inventory sites, make sure your inventory is correct so you can use Advanced Inventory.

Depending on your current method, you may need to do more to change to Advanced Inventory. Here are detailed instructions if:

You track inventory at multiple sites outside of QuickBooks

With this method, you use different software to track how much inventory you have at each site.

To switch to the Advanced Inventory method:

1. With your other software, run a report to identify the inventory at each site.
2. If you haven’t yet, set up your inventory items in QuickBooks.

You create separate items (sub-items or assemblies) for each site

You use a naming method or structure to distinguish between items at different sites. For example, if you have 3 warehouses, you use 3 items to show the same item at each warehouse.

If you use this method, follow these steps to switch to the Advanced Inventory method.
Reminder: These steps are complicated. Try to get help from a QuickBooks ProAdvisor or your accountant.

Calculate the inventory for each item at each site. You should also know the global inventory or the total quantity across all sites. Take note of these numbers.

1. Clean up your item list. There should only be one item on the list for each item you sell.
   1. Decide which items to use in the future. Remember that you only need one item in QuickBooks Desktop. In the example above, suppose you choose WH1 Widget 1.
   2. Adjust the quantities to zero for items you won't use. Then make the corresponding increase for the item that you’ll  use. In the example:
      1. Decrease the inventory for WH2 Widget 1 from 20 to 0.
      2. Decrease the inventory for WH3 Widget 1 from 40 to 0.
      3. Increase the inventory for WH1 Widget 1 from 100 to 160.

After all the adjustments, the net effect on the adjustment account should be zero. However, if the same item at different locations has different average costs, the net effect won't be zero. There are 2 ways to handle this problem.

1. Talk to your accountant. If the value differences are small, create a special inventory adjustment account for this transaction and make your adjustment. Then have your accountant write off this amount.
2. If the values are significant, adjust the quantity for the redundant items (WH2 Widget1 and WH3 Widget1 in the example above) to 0. Note the value of these adjustments for the next step. Also, adjust the quantity of the item you’re keeping and increase the value of the adjustment by the amount in the step above.
   1. From the Inventory menu, select Adjust Quantity/Value On Hand.
   2. From the Adjustment Type ▼ dropdown, select Quantity and Total Value.
   3. From the Adjustment Account ▼ dropdown, select the account you normally use.
   4. From the Inventory Site ▼ dropdown, select the inventory site you set as your default when you turn on Advanced Inventory.
   5. Select Find & Select Items..., then choose the items that represent the same item across multiple sites.
   6. In the rows that contain the redundant items (the ones you're not keeping), enter 0 in the New Quantity column. Then, calculate the sum of the Qty Differences for all these redundant items.
   7. In the row that contains the item you are keeping, add the quantity from step 6 in the Qty Difference column (as a positive number).
      Note: In the New Value or New Global Value column, set all values to 0, then note the Total Value of Adjustment amount.
   8. In the row that contains the item you are keeping, enter the amount you noted in the New Value column. The Total Value of Adjustment should now be zero.
   9. Select Save & New and repeat these steps for the next set of items.

3. Hide (make inactive) the redundant items you won't use (in this example, WH2 Widget 2 and WH3 Widget 3).
   Note: You can also merge redundant items. However, if you merge items, you lose any historical information about sites/locations.
4. Rename the remaining items to remove any reference to the site (in the example, remove "WH1" so the item is now called Widget1).

You use class tracking to track inventory sites/location

With this method, you use classes to represent each site or location. Then you classify inventory purchase and sales transactions.

To switch from this method, ‌just stop using it then follow these steps.

1. Calculate the inventory at each site.
2. Clean up your item list:
   • You should have one inventory part or assembly part item set up in QuickBooks to match each inventory part you buy or sell.
   • This inventory part should accurately reflect the global (across all sites) inventory for that item.

Reminder: Advanced Inventory doesn't classify income and expenses. It only tracks inventory. Use class tracking to classify non inventory income and expenses at different locations.

You use another method

If you used a different method to track multiple inventory sites, be sure to:

1. Figure out the inventory at each site.
2. (Optional) If your current method uses an item list, you must first clean up your item list:
   • You should have one inventory part or assembly part item set up in QuickBooks Desktop to match each inventory part you buy or sell.
   • This inventory part should reflect the global (across all sites) inventory for that same item.

Step 4: (Optional) Set reorder points for each site

With Advanced Inventory, you can track when each item needs to be reordered at each store. This means you can have a different reorder point for each site, and QuickBooks Desktop can tell you when you're running low at a specific site.

Note: Site reorder points don’t "roll up" (add up) to calculate a global reorder point. You must set the global reorder point for each item.

1. Go to Lists, then select Inventory Site List.
2. From the Activities ▼ dropdown, select Set Reorder Points.
3. Select the Set reorder point for site ▼ dropdown and select the site you want to set a reorder point for.
4. In the Site Reorder Pt (Min) column, enter the reorder point for each item.
5. To set reorder points for other sites, select the Set reorder point for site ▼ dropdown and select another site.
   Note: Repeat the process until reorder points are set for all sites.
6. Select OK.

Step 5: Transfer opening quantities of items to each site

When you turn on Advanced Inventory, QuickBooks prompts you to begin with one temporary starting site. Consequently, QuickBooks shows that your entire inventory is stored at one location.

Now you’re ready to transfer your inventory from the starting site to their actual sites. To do this step, you need current inventory counts for each site.

Enter a new transfer for each site

1. Go to  Inventory, then select Transfer Inventory.
2. In the Date field, enter the date of the transfer.
3. In the Reference No. field, enter the appropriate transfer number. We recommend "setup1," "setup2," and so on for these transfers.
4. In the Transfer from ▼ dropdown, select your temporary inventory site.
5. Select  the to ▼dropdown and select the actual inventory site.
6. Select the inventory items to transfer to the site.
   1. To select individual items, go to the Item column.
   2. Select the dropdown, then select an inventory item.
   3. To select multiple items, select Find & Select Items…
   4. Check the items you want to transfer then select Add Selected Items.

7. In the Qty to Transfer column, enter the amount to transfer for each item.
8. (Optional) In the Memo field, enter the reason for this transfer. Select Print if you need a printed copy of the transfer
9. Select Save & New, then repeat these steps for each inventory site. When finished, select Save & Close.

Tips and tricks:

If you want to transfer the same items to multiple sites, you can duplicate the inventory transfer:

1. Go to  Inventory, then select  Transfer Inventory.
2. Select Previous until you find the transfer you want to duplicate.
3. Select Edit then Duplicate Inventory Transfer.
4. Select OK.
5. Select Save & New if you need to  repeat these steps for each inventory site.
6. When finished, select Save & Close.