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Level 2

Item Types for Digital Products

I'm having trouble figuring out the best way to set up our item types, as we sell digital products (ebooks, publications, etc). My basic question is how to treat digital products in quickbooks online in general. 

Should I be setting our products up as inventory items? Even though we don't have any inventory counts (and don't want to track quantity of course since it's digital / unlimited)

 

And what would be the best way to track our subscription offering? Would that be considered a service instead? 

 

Thank you for any help and advice here!

Solved
Best answer September 04, 2020

Best Answers
Level 15

Item Types for Digital Products

digital products do not have a cost, you can use a service item for the sale.  Using a service item can still get you a count of items sold.

View solution in original post

4 Comments
Level 15

Item Types for Digital Products

digital products do not have a cost, you can use a service item for the sale.  Using a service item can still get you a count of items sold.

View solution in original post

Level 2

Item Types for Digital Products

Thanks Rustler, very helpful! 

Would you recommend using Service items for all variations of our digital products (ie. subscriptions, one-time sales, etc) as well?

Level 1

Item Types for Digital Products

How would you record any fees associated with the eBook? Though there is no printing cost for digital products, there are eReader fees that could be considered COGS.
QuickBooks Team

Item Types for Digital Products

Hi there, ADP1981. 

 

Thank you for dropping by, I'm happy to show you how to add service fees. You can follow along below:

 

Step 1: Create a service fee item:

 

In QuickBooks, create the fee as a service item. This lets you quickly add a standard fee with a clear, detailed description to invoices.

  1. Go to the Sales menu and select the Products and services tab.
  2. Select New.
  3. Select Service.
  4. Give the fee a name.
  5. From the Category ▼ dropdown, select the category that best describes the fee. Learn more about item categories.
  6. Fill out the rest of the fields as needed.
  7. When you're done, select Save and close.

Tip: If you don't charge a standard fee, don't worry. You can always change the fee amount on the invoice.

 

Step 2: Add the fee to an invoice:

 

Follow the steps based on whether you've alraedy sent the invoice you need to add the fee to.

If you haven't sent the invoice yet

You can add the fee as a line item to the existing invoice.

  1. Go to the Sales menu and select the Customers tab.
  2. Find and open the customer's invoice.
  3. In the Product/Service dropdown, select the fee item you created.
  4. In the Message on invoice section, include a note about the fee. This is optional.
  5. Select Save and Send or Save and Close.

If you already sent the invoice

Create a new invoice for the fee and send it to your customer.

  1. Select + New.
  2. Select Invoice or Send Invoice.
  3. Fill out the invoice.
  4. In the Product/Service dropdown, select the fee item you created.
  5. In the Message on invoice section, include a note about the invoice the fee is related to. Also include the invoice number.
  6. Select Save and Send or Save and Close.

If that doesn't quite work for what you're looking for, I would definitely recommend reaching out to an accountant for further advice on the topic. If you have any other questions, feel free to post below at anytime. Thank you and have a nice afternoon. 

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