Material vs. Supplies

I can walk you through how you can categorize the materials and supplies in QuickBooks Online (QBO), Jonnybegood.

All businesses are unique, you may wish to reach out to your accountant for additional guidance to ensure the what category you need to apply to your materials and supplies. Then, we can use categories to group items of the same type. If you want to be more specific with grouping items, you can also create sub-categories. Here's how:

1. Go to the Gear icon on the top menu, then select Products & services (Take me there).
2. Click More ▼, then Manage categories.
3. Select New category, then enter the name of the category. If you need a create a sub-category, select Is a sub-category checkbox and the main category.
4. Press Save.

Also, you can select a category when you add a new inventory product, service, or non-inventory product. Then we can add an existing product or service to a category. If you have an uncategorized item, here’s how to add it to a category:

1. Go to the Gear icon on the top menu, then select Products & services (Take me there).
2. Find the product or service you want to categorize.
3. Tap Edit.
4. Choose the Category ▼ dropdown, then select one that fits this item. Or select + Add new to create a new one.
5. Press Save and close.

You can check out this article to learn more about organizing your products and services in QuickBooks Online: Group products and services into different categories in QuickBooks Online. Additionally, you can also seek self-help video tutorials on our video tutorials for QuickBooks Online to help you get your QuickBooks tasks done in no time.

You're welcome to reply to this thread if you have more questions or need help with other tasks in your account. We're always available to help you out. Take care!

@Jonnybegood 

That's really up to you but 'Job Supplies' is a typical expense category to use.  Materials generally refers to assets - things you have in stock.  If you buy them on a per job basis - I'd go with Job Supplies.  

ok so everything I buy is a per job basis as I do not want to have inventory.  There are only 2 items that I buy that are in bulk.  One is my waterproofing membrane it comes in 150 rolls and the other is the waterproofing that I roll on the walls (Red Guard) it comes in 3-gallon buckets.  So how would I list these?  Is there any of the expenses that I can call COGS?

@Jonnybegood 

Are you on cash basis (as opposed to accrual)?  Cash basis taxpayers do not carry inventory and, therefore, should not have any COGS.  Expense the membrane and the Red Guard to Job Supplies when you purchase them.  Don't use COGS.  COGS is only for items that you carry in inventory that are expensed to COGS when they are, as the name indicates, sold.    

I am currently using accrual accounting.

@Jonnybegood 

I would still use Job Supplies or Materials for the membrane and waterproofing.  You really don't carry inventory - you buy supplies on a per job basis and some of those supplies come in quantities that exceed the amount required for the job.  You could expense them immediately to COGS but COGS has additional reporting requirements on your tax return.  It's cleaner, easier and just as correct to use Job Supplies or Materials IMO.