How to handle a change in price from the vendor

I'm here to elaborate on some information on how to handle prices, Rozmore13.

Purchase orders are business documents that detail a buyer's request for products or services from a supplier. Sometimes, changes in prices happen. With POs, this helps us take control of spending while streamlining the process of acquiring goods. You can manually update the prices on your PO once you receive the bill so prices on both forms are exactly the same. You'll only have to open the PO and then change the prices from there. After that, you can save and close.

 Also, PO is a non-posting transaction so, with the difference in prices against the bill, this won't give a great impact on your books. 

Furthermore, QuickBooks offers a variety of reports that cater to the aspects of your business. Learn from this article how to customize them so you'll be able to get the information you need: Customize Reports In QuickBooks Online.

Fill me in if you have any questions about item prices. I'll be here to help.

Maria,

Thank-you for the advice.  One additional question.  If you pick up the PO and change the price on the PO, must you go to the Inventory Product and Change the Sales Price and the Purchase Price in a separate step.  I

have been told that this can be accomplished by changing the amounts once.  if so, how?

Thanks,

Roslyn Morgante

Constructive Advice, LLC

I got you covered, @Rozmore13. I'm here to help you change the price of your inventory products in QuickBooks Online (QBO). 

In QBO, once you've changed the price of the items assigned to a Purchase Order (PO), the changes won't affect the entered purchase price of the product. You'll have to edit that item on the Products and Services page. To do so, you'll need to input the info under the Cost field. Let me guide you throughout the process:

1. Navigate to the Gear icon and select Products and Services.
2. From there, look for the item you need to update and click Edit.
3. Scroll down to the Cost field and enter the new purchase price of the item.
4. Make necessary changes and select Save and close when done.

For reference, please visit this article: Add product and service items to QuickBooks Online. 

Additionally, the program will easily help you see open PO in your account. To get started, just go to the Reports menu and search for Open Purchase Order List report.

I'd be glad to assist you further if you have any other concerns about updating prices of your items in QBO. Don't hesitate to get back here in the Community. Have a good one and take care.

We do not use PO's.  We place all our orders with vendors over the phone.  Sometimes costs go up and so do the prices we charge for the products.  If we change the cost and price amounts in the Products and Services page, will that retroactively change the costs and prices shown for the items already on hand?  How does this work using FIFO inventory cost accounting?

Example: we have 10 light bulbs on hand at a cost of $1.00 each which we sell for $1.40 each.  These are shown in our inventory on the Products and Services page.

Then we order 15 more of the same light bulbs and the vendor's new cost is now $1.50.  We will sell them for $2.10 each.  I do an inventory quantity adjustment so it now shows we have 25 light bulbs on hand. If I go in and change those dollar amounts in the inventory, then sell 20 light bulbs to a customer, with FIFO it should show that we sold 10 at $1.40 each= $14.00, and 5 at $2.10 each=$10.50 (so we're charging our customer $24.50) and the cost of goods sold should be 10 at $1.00 each =$10.00 +  5 at $1.50 each = 7.50  = $17.50  Does is work like this if I change the cost/price on this inventory item on the Products and Services page?    I have watched a video on this but cannot see how to make it work.  https://www.youtube.com/watch?v=mtQwn-0fXeI  It is titled QuickBooks Online Inventory Valuation F.I.F.O. Method (First In First Out FIFO)

Thank you!

It's good to have you here, @Polly1.

I have here information that would explain how QBO handles FIFO. Let me expound this for you.

QuickBooks uses the weighted average cost to determine the value of your inventory and the amount debited to COGS when you sell inventory. The average cost is the sum of the value of all the items in inventory divided by the number of items. 

The best course of action to show how QuickBooks got the item's average cost is by running the Inventory Valuation Summary report. Here's how:

1. Select Reports, then select Inventory.
2. Select Inventory Valuation Summary, then set the dates to All.
3. Double-click the item in question.

For detailed information about this, feel free to read this article: Understand inventory asset and cost of goods sold tracking.

As to your question about changing the cost and price amounts on the Products and Services page, we only need to update the cost and price of the inventory items in our Bills when purchasing and Invoices when selling not in the Products & Sevices page.

For future help about FIFO in QuickBooks, feel free to check out this article: What is FIFO and how is it used for inventory cost accounting?

I'm glad to have you here. If you have additional questions about inventory, don't hesitate to reply to this post. We'll be happy to lend a hand. Keep safe, and have a good one!