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NumbersByNelson
April 28, 2023
Solved

Inventory

  • April 28, 2023
  • 1 reply
  • 2 views

I have started working with a construction company who wants to begin using inventory for items like windows, doors, appliances.  

 

So let's say they purchase 50 windows from ABC Window Supply.  When they enter the bill, they received 50 windows into inventory, and the asset value is based on that bill from ABC Window Supply.

 

But when the build a house and sell it, the invoices to customers are just for construction draws on a total contract.  They don't have a line item for 10 windows (which would reduce inventory and show cost of goods sold for the 10 windows).  

 

We could adjust inventory quantity when 10 windows leave their warehouse, but how would we cost it to the customer?  Neither inventory adjustment nor journal entries go to a customer.

 

Any ideas?  TIA!

Best answer by Rainflurry

@NumbersByNelson 

 

You can receive the windows into inventory with a bill and then expense them to COGS by creating a $0 invoice for the customer/project.  That will remove the windows from inventory and book the COGS to the project without creating an entry to income which is being done through your contract invoice.

1 reply

JaeAnnC
JaeAnnC
Level 6
April 28, 2023

It's good to have you here today, Nelson. 

 

I can assist you in setting up a billable expense in QuickBooks Online (QBO) so you can charge your customers for the windows you bought.

 

When you work for a customer, you may incur expenses that can be charged to them. Billable expenses are simple to enter and keep track of, allowing your customers to compensate you once they receive their invoices. 

 

If you haven't yet, turn on the billable expense option first. Here's how:

 

  1. Go to the Gear icon and select Account and Settings.
  2. Go to the Expenses tab and click Edit from the Bills and Expenses section.
  3. Turn on the following: Show Items table on expense and purchase forms, Track expenses and items by customer, and Make expenses and items billable.
  4. You can also set up the markup rate, expense tracking, and sales tax charge.
  5. Select your default bill payment terms and select Save.

 

Next, edit the bill to make it billable to the customer. To do that:

 

  1. Go to the Expenses tab and select Bills.
  2. Locate the bill and select View/edit bill from the Action dropdown column.
  3. Check the Billable column for the item you want to charge the customer. 
  4. Select a customer under the Customer column and select Save and Close.

 

Once done, you can create an invoice to reimburse the cost. After selecting a customer, the Add to Invoice window appears on the right side of the page. You'll have to click Add to include it on the invoice.

 

In QBO, you can also run reports to get a complete picture of your business's various transactions, including expenses.

 

Let me know if you have additional concerns about managing your expenses in QBO. I'm always here to answer your questions anytime. Keep safe!

N
NumbersByNelsonAuthor
April 28, 2023

Thank you for your reply.  I'm not sure this solves our situation.

 

1.  It doesn't allow us to keep track of the inventory asset value and quantity.  

 

2.  Often when items (like windows) are purchased, it is unknown which customer(s) they will eventually go to.  They are just brought into the warehouse to be available for future use.

 

3.  The customers are simply invoiced for a contract amount.  They are not invoiced specifically for windows, doors, etc.  

K
Kurt_MQuickBooks Team
QuickBooks Team
April 28, 2023

I appreciate you for getting back here in the thread, Nelson.

 

You may want to enable the Track Inventory Quantity on hand in your Accounts and setting. This way, you can track your inventory asset value and quantity inside QuickBooks Online (QBO). Here's how:\

 

  1. Access your QuickBooks Online company.
  2. On the top-right corner, click the Gear icon and then select Account and settings.
  3. Select the Sales tab.
  4. Select Edit ✎ in the Products and services section.
  5. Turn on Show Product/Service column on sales forms.
  6. Turn on both Track quantity and price/rate and Track inventory quantity on hand.
  7. Select Save and then Done.

 

See this article for more information: Set up and track your inventory in QuickBooks Online.

 

Also, upon performing what my colleague suggested above, you'll need to ensure that when doing transactions inside the program, you'll add a customer to be associated with the business transactions you created. With this, it's easier to track billable entries entered inside your company file.

 

Moreover, you can check this handy article to help you generate a report that shows details of your sales and inventory status: Use reports to see your sales and inventory status.

 

Nelson, please feel free to leave a comment below if you need further assistance managing your inventory items inside QuickBooks. I'll be here, ready to help you anytime. Take care, and have a nice day!

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