Inventory and Free Samples

winewidow · ‎June 30, 2022

Hi all! I need help accounting for samples in quickbooks.

Here's the scoop - I run a wine wholesaler and track my inventory in quickbooks. As part of my business, I routinely open bottles of wine to allow prospective customers (wine shops and restaurants) to taste the wine. I need to account for these samples (which are obviously free to my customers) both for my inventory shrinkage and for my monthly tax bills which require that I show quantities sold and quantities disposed of otherwise (samples, breakage, etc.). Some of my vendors also reimburse me for samples, so I have to be able to track these bottles that get opened.

To-date, I've been using the "bills" feature in quickbooks with a separate bill for each month and a list of the wines I've sampled and $0.00 for cost. But I'm worried because my inventory is starting to look off, that these bottles may not be getting deducted properly.

Help! How shall I track these sample bottles so that I can show there is no cost, and so I can pull them from inventory, and have accurate reports for my supplier/vendors and for my tax statements!

Rainflurry · ‎June 30, 2022

@winewidow

We have a similar scenario for a business and the easiest way to do that, IMO, is to create an expense account called "Sampling Expenses". When you pull a bottle out of inventory, create an inventory quantity adjustment (New > Inventory qty adjustment) and under 'Inventory adjustment account', choose the newly-created sampling expense account. This will remove the item from inventory and book the expense at cost.

winewidow · ‎June 30, 2022

Thank you so much for your quick response!

Forgive my Quickbooks-newbie ignorant question: If I create an expense account for the samples, would I be able to filter the entries by date and capture and sort what was sampled in any given month? One of the reasons using bills has been so convenient (if erroneous) is that I can add to the list as the month progresses and it gives me a clear snapshot of what was sampled in that month.

GebelAlainaM · ‎June 30, 2022

Hello there, @winewidow. It's okay to get confused. We all encounter that, especially when we're new to something. I'm here to help you.

I agree with @Rainflurry. You can create an expense account for "sampling expenses" and then make inventory adjustments to ensure it's accurate when you pull up the inventory reports.

On the other hand, yes, you can filter the date range with that quick Report. If you want to customize Report, here's how:

Open the Report and then scroll up a bit.
Click the Customize option at the top right.
In General drop-down, you can change the date in the Report period section.
You can also go over the Rows/Column, Filter, Header/Footer if you need to customize it as well.
Then select Run report to save changes.

I'll be sharing this article if you want to learn how to customize reports and focus on the details that matter the most to you: Customize reports in QuickBooks Online.

Furthermore, since you've mentioned that one of the reasons you're using bills is that it's convenient, it will also work. However, you'll need to refer to your accountant. That way, they can assist you further with accounting for your inventory and sample products.

For more insights about tracking inventories and the default accounts in QuickBooks Online, you may check out these articles:

If you have any other concerns or clarification with managing your inventory, feel free to post a reply. I'll be here for you. Have a great business!

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