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TallgrassGraphics
Level 1

Turning hobby into business - moving inventory

I started a hobby in 2017. I purchased equipment and inventory during the year to be able to make my own items. Then started selling the items online.

 

My product took off and in 2018 my sales were high enough to make me file taxes. I'm starting fresh with QuickBooks Premier.

 

How do I transfer the inventory from 2017 into QuickBooks as I'm selling the items I purchased when  it was a hobby?

2 Comments 2
AldrinS
QuickBooks Team

Turning hobby into business - moving inventory

You've come to the right place, TallgrassGraphics.

 

I have just the steps that'll help transfer your inventory from 2017 into QuickBooks Premier.

 

First and foremost, I'd like to congratulate you on turning your hobby into a business. After all, doing what you love is the secret to achieving success.

 

That said, it would be a good idea to set up the equipment and inventory that you use to make your own items in QuickBooks. The steps below will guide you through that process:

 

To turn on the Inventory Tracking feature

  1. Click the Edit menu
  2. Choose Preferences.
  3. Select Items & Inventory.
  4. Go to the Company Preferences tab.
  5. Check the Inventory and purchase orders are active option.
  6. Click OK.

To add items in QuickBooks Desktop

  1. Click the Lists menu.
  2. Select Item List.
  3. At the bottom left corner of the page, click the Item drop-down button.
  4. Select New. You may also press Ctrl + N.
  5. From the Type drop-down menu, choose Inventory Part.
  6. Enter the Item Name/Number, Cost, and Sales Price.
  7. From the Income Account drop-down menu, select the income account you wish to use.
  8. Click OK. Repeat these steps for the other items.

Once you've set up them up, the next thing you'll want to do is replicate the transactions that occurred as you were purchasing the equipment. To do this, you can either receive or enter bills against the item. With this, you'll be able to transfer the details, like the cost and quantity, of the items into QuickBooks.

 

From there, the next thing you'll want to do is to create and build Inventory Assembly Items to record the items that you make. Here's how you can do it:

 

To create Inventory Assembly Items

  1. From the Lists menu, select Item List.
  2. Choose Item at the bottom of the list and select New.
  3. From the Type drop-down menu, choose Inventory Assembly.
  4. Enter a name that will distinguish this item from any others on the list.
  5. Enter the Cost and Sales Price.
  6. From the Income Account drop-down menu, select the income account you wish to use.
  7. In the Bill of materials section, enter the equipment used to create this item in the Item field and the quantity in the QTY field.
  8. Click OK. Repeat these steps for the other items.

 

To build Inventory Assembly Items

  1. From the Inventory menu, choose Build Assemblies.
    - If you don't see the Inventory menu, click the Vendors menu instead, and choose Inventory Activities, then Build Assemblies.
  2. From the Assembly Item drop-down, select an assembly item to build.
  3. Enter the Date when this was created.
  4. In the Quantity To Build field, enter the number of items you created.
  5. Click Build & Close. However, if you need to build another one, select Build & New instead.

Build.PNG

Lastly, now that you have the assembled items, all you have to do now is to record the sales transactions, That should do it. With these resources, I'm confident you'll be able to keep track of all of this and catch up to your year-to-date records.

 

Good luck! Please don't hesitate to touch base with me here in the Community if there's anything else I can do for you. I assure you that I'll do my best to help you out.

qbteachmt
Level 15

Turning hobby into business - moving inventory

@AldrinS

 

Please Learn from the input here.

 

@TallgrassGraphics

You won't enter the Purchases, now. You already Have that stuff.

 

Make the inventory items for what you need to Track as inventory. That might not be All materials, though. A Bakery doesn't inventory track per teaspoon of Salt, for instance, but they might need to track expensive Cake Stands.

 

Once you have all of the item names created, make one Adjust inventory Screen to Update the items with your Quantity and Cost Basis for what is on hand as of your transition date.

 

You only use Build Assembly when you are a production operation and you want to Relieve the components from stock and put the Finished Product on hand. For your Transition, you include Product on hand that is Assembly Items in the Adjustment screen. You don't also need to Build them. Just show how many you have and your Cost for them on hand.

 

And this is top left, offset from Equity. You are transitioning. Your products on hand are your Asset.

 

You likely need to meet with your own CPA to know what is called your Trial Balance for this transition.

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