How to setup chart of accounts for non-inventory item sales in Quickbooks Simple Start?

QueueBeeNewbee · ‎February 16, 2019

Hello,

I run an IT Business and regularly make hardware, software and miscellaneous non-inventory item purchases that are then sold to my customers at cost. I am trying to determine the correct way to setup my Chart of Accounts so that non-inventory item income is then routed to the right account when we get paid. My goal is to ensure that we don't show profit on those non-inventory item sales since we don't make a penny off of them.

I initially thought I would have to link my non-inv items to two accounts (a non-inventory COGS account, and a non-inventory income account), but that doesn't seem to be possible based on my available options.

I am using Quickbooks Simple Start, so I hope this is something that can be done with this version.

**Edit: Thinking more about it, perhaps I just need to verify that I am selecting the right account for my non-inventory items. Currently, I have the account selected as Reimbursable Expenses for my Non-Inventory Items. Would that be the correct account to accomplish my goals above, or does something more need to be done?

Thanks in advance!

Rustler · ‎February 18, 2019

Whether you mark up the incidental items you purchase or not is immaterial

post the purchase to an expense account materials expense or something, and then what the customer pays you is income

on the P&L income is reduced by expenses

simple start and essentials do not have two sided items the way all desktop versions do, so if you use items for purchases (non inventory) then you will have to use a service item for the sale. IMO it is easier to just post the purchase to an expense account, and then use the service item on the sale

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Rustler · ‎February 18, 2019

Whether you mark up the incidental items you purchase or not is immaterial

post the purchase to an expense account materials expense or something, and then what the customer pays you is income

on the P&L income is reduced by expenses

simple start and essentials do not have two sided items the way all desktop versions do, so if you use items for purchases (non inventory) then you will have to use a service item for the sale. IMO it is easier to just post the purchase to an expense account, and then use the service item on the sale

QueueBeeNewbee · ‎February 22, 2019

Thanks Rustler, your reply made perfect sense after some thought. I got everything working as intended per your instructions.

Cheers!

Bdazza · ‎February 22, 2021

This is the first time I setup my own chart of accounts and we are starting selling guns and bullets so I am not sure exactly what to put in there

SarahannC · ‎February 22, 2021

Hello there, Bdazza.

I'll provide you some information about the details you can put in the account you set up for the first time.

You can set up an income account for the sales (Guns and Bullets). Let me show you how:

Go to Accounting on the left panel.
Within the Chart of Accounts tab, click New at the upper-right corner.
Click the Account Type drop-down arrow. Then, select Income.
Click the Detail Type drop-down arrow. Then, select Sales of Product Income to track income from selling products.
Enter all the required information.
Then, Save and Close.

For additional tip, every time you select a detail type of the account, you'll its definition below.

However, I'd still recommend reaching out to your accountant to seek an advise. They can also share with you better way on how to handle your accounts to keep them accurate. To learn more about the Chart of Accounts (COA) in QuickBooks, please refer to the articles added below:

Let me know if you still need help. I'm always here whenever you need help. Take care always.

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How to setup chart of accounts for non-inventory item sales in Quickbooks Simple Start?