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Entering Inventory for Online Retail E-Commerce

I am entering historical data for my business that started in January.

I buy and sell used clothing from thrift stores.  I average out my COGS.

I am confused about how to enter Inventory into Quickbooks desktop.

I have record of the initial amount that I had purchased before officially starting my business and then the total purchases for the month.  

 

I entered my beginning inventory directly into "Items & Services" but didn't enter it in as a bill or connect it to any transaction because the transaction too place before the business started. Did I do this incorrectly? 

 

How do I log all other inventory purchases correctly so that it updates Inventory Asset?  I always pay cash/debit when I purchase my inventory so I will never need a purchase order.  Do I use "Bill Against Inventory" for the cost of the purchase and then enter the inventory purchased?  And do I need to do this for the initial set-up of inventory?

Solved
Best answer 08-27-2019

Accepted Solutions
Anonymous
Not applicable

Re: Entering Inventory for Online Retail E-Commerce

Hi there, kmasta.

 

For reporting purposes, you’ll need to enter your begging inventory through a transaction. Since this is a historical data, you can record them using the steps below:

  1. Click Vendors at the top. 
  2. Select Received items from the drop-down option. 
  3. Select the inventory item from the Item drop-down box
  4. Fill in the Quantity and other information. 
  5. Click Save & Close. 

Regarding your second question, you can log all other inventory purchases correctly by creating a Bill or a check. These transactions will debit the Item's Inventory Asset account and credit your A/P or bank. For additional details please refer to this article: Understand Inventory Assets and COGS tracking.

 

You can also check your accountant to make sure everything is recorded properly. 

 

Let me know if you have additional questions. 

3 Comments
Anonymous
Not applicable

Re: Entering Inventory for Online Retail E-Commerce

Hi there, kmasta.

 

For reporting purposes, you’ll need to enter your begging inventory through a transaction. Since this is a historical data, you can record them using the steps below:

  1. Click Vendors at the top. 
  2. Select Received items from the drop-down option. 
  3. Select the inventory item from the Item drop-down box
  4. Fill in the Quantity and other information. 
  5. Click Save & Close. 

Regarding your second question, you can log all other inventory purchases correctly by creating a Bill or a check. These transactions will debit the Item's Inventory Asset account and credit your A/P or bank. For additional details please refer to this article: Understand Inventory Assets and COGS tracking.

 

You can also check your accountant to make sure everything is recorded properly. 

 

Let me know if you have additional questions. 

Established Community Backer ***

Re: Entering Inventory for Online Retail E-Commerce

@Anonymous 

Regarding your second question, you can log all other inventory purchases correctly by creating a Bill or a check. These transactions will debit the Item's Inventory Asset account and credit your A/P or bank.

NO, you never ever post to inventory asset when you use inventory type items.

Established Community Backer ***

Re: Entering Inventory for Online Retail E-Commerce

@kmasta 

 

QB is not suited to unique items, which is what you buy and sell. I would suggest to you that you do not use inventory type items in QB, and instead use the periodic inventory system

There are two ways to do periodic inventory, choose one and stick with it, you can not mix and match

1. (my preference) Create an asset account called purchases and post all purchases of item for resale to that account. Periodically, weekly, monthly, etc value the inventory on hand, subtract that value from the amount shown in the purchases account and do a journal entry for the answer to the subtraction
debit COGS for that value
credit purchases for that value

OR

2. Post all purchases to COGS. Periodically, but at least at the end of the year, you value the inventory on hand and do a journal entry.
debit the asset purchases account for that value
credit COGS for that value

Print the P&L
then reverse the journal entry
debit COGS for that same value
credit the asset purchases account for that value

This last journal entry, moves the value of what was on hand at the end of year back to COGS so the cost will be counted against the new year sales.

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