How can I allocate shipping and freight costs to the inventory items purchased?

By doing this, the company will never see how much expense is actually paid out for Freight/Customs/etc, correct?  Since the negative line item is zeroing out the payment to the other vendor.  I understand that the cost is going to be updated in COGS, but that will all go to one COGS account that is tied to the item in products.  Is this an issue or is it just something you can't see...

wil this tip work with the Desktop version or only QBO?

Hello there, Amy_Engelhardt.

Let's get this straightened out for you.

The tips shared by one of the best Established Community Backers @Rustler is applicable on both QuickBooks Online and QuickBooks Desktop.

Also, I would like to commend hkhatri for sharing his workaround. As he mentioned, you can create a bill using an expense account labelled Shipping and Handling. Once done, you can make an inventory value adjustment for purchased items for the Shipping and Handling cost to reflect into the same account.

Here's an article to know more about adjusting inventory value (Scroll down until you reached the Adjust the value of an inventory item section): Adjust inventory quantity or value.

If you need assistance in doing this, feel free to reach out to our QuickBooks Care Support through this contact information:

1. Go to: https://help.quickbooks.intuit.com/en_US/contact.
2. Choose your QuickBooks Product.
3. Select your QuickBooks version.
4. On the Contact Us page, click a topic.
5. Click on the Get Phone Number button to see the support number.

That should do it. Please don't hesitate to let me know it goes or if you have additional questions about inventory in QuickBooks. I'm always here to help.

Hi Rustler and Charies,

Thanks for your help.

Just a question on this work-around (although I wish that QB would add this functionality to the program in the first place as paying shipping etc is a normal part of doing business) it works fine..... except that, because the clearing account is zeroed out, there is no value for inventory in the balance sheet, what am I missing? To be clear, my average cost is right and my GP in the sales by item summary is also right but I don't see an inventory value in the balance sheet.

Thanks for joining this thread, @Sleepytime. 

I appreciate you checking your Sales by Item Summary report to help fix the missing inventory value in the Balance Sheet. 

First of all, it's a great suggestion how you'd like to handle landed costs and paying shipping in the program. Rest assured, I'll share your feedback along here on my end. 

The balance sheet provides an illustration of your company's financial position. Just to verify, what accounting method did you currently use? The method you use may have an impact on how your Balance Sheet reports. This might also be the reason the inventory values aren't showing. 

Also, one factor is the inventory valuation method. If you're using QuickBooks Desktop, we use the Average Costing method. It takes the last purchase of on-hand stock and any prior purchases until all quantities are accounted for. 

For more information, you can check out these helpful articles below: 

• Which Inventory Valuation Method Should You Use?. 
• Best Way To Analyze Inventory Costs

Inventory COGS is only affected when you sell inventory items on invoices or sales receipts. I'd suggest running the Transaction Journal Report to see if there are invoices/sales receipts created for these items. You can go through this article for more details: Understand Inventory Assets and COGS Tracking. 

If you're using QuickBooks Online, we use the First-In, First-Out (FIFO) method. The cost of the older inventory is assigned to the COGS and the cost of the newer inventory is assigned to ending inventory. If you have an inventory with a zero cost, this will might appear on your report.

To help fix this, you'll first need to remove all zero value items. Then, you can assign value when creating bills when purchasing items. This will have inventory values on your Balance Sheet report. 

This will help keep your books in order, @Sleepytime. 

I'm here anytime if you have other reporting concerns. Have a great day. 

Hi, can you pls reconfirm if QBO is under FIFO method? As I am seeing its on Average Costing.

Thanks for joining in the thread, Q-B Online User 1.

QuickBooks Online only handles inventory in First In, First Out (FIFO) method. When running a transaction report that includes two different rates that occurred for the same inventory item, that transaction will have separate lines on the report for each COGS or asset amount.

For more details about FIFO, you can check out this article: What is FIFO and how is it used for inventory cost accounting?.

I have articles here about inventory tracking and report status:

• Set up and track your inventory

• Use reports to see your sales and inventory status

I'm just a reply away if you need anything else with managing your inventory. I'm always here to help.

We have been using the work around for landed costs but discovered it does not impact the build assemblies.  Is there a way to get the landed cost in the build assembly by item?

Thank you!

Hi talverson,

At this time, getting the landed cost in the build assembly item is unavailable in QuickBooks Online (QBO). You'll want to follow the recommended workaround provided by one of our Established Community Backers, Rustler.

In case you want to create a bundle item in QBO, refer to this article: Introducing QuickBooks Bundles and Reorder Points.

Let us know if you have further questions. We're here to help.

Completely new to QBO and thought I'd check it out after running into this same problem in Xero.

From a very brief look around, I'm just wondering, say for example I'm selling imported T-Shirts.

Would a possible workaround be to create stock products for "T-Shirt Cost", "T-Shirt Freight Cost", "T-shirt Design Cost", etc and then create a bundled product containing 1 QTY of each of the "parts" making up the total landed cost of the goods? And then always use the bundle as the sold item?

Would this be possible, and if so, what negatives would there be compared to Rustler's suggestion?

Hi

What if tax is not the same for goods and shipping costs?  Then we have tax mess..

Regards

Uros

Hi there, @Uros1. 

Thanks for joining in this conversation. In QuickBooks Online, you'll need to add sales tax categories to the things you sell to track sales tax more correctly. 

The rules for taxing a product or service can change depending on what you sell and where you sell it. QuickBooks keeps track of all those tax rules for you.

For more insights, you can check out this article to learn more about the difference in tax treatments: The Sales Tax Life-cycle of a Lemon.

For future reference, read through this article: Mapping your products in an automated tax system.

Let me know if you have additional questions about sales taxes in QuickBooks. I'm always around to help.

Hi Rustler, 

Thanks for your suggestion it makes a lot of sense and works too. The only pickle for me is that my shipping payments are in USD while I my vendor billing is Chinese Yuan. Would you able to recommend any workaround for this?

HI Rustler,

Thanks for this post. It helped sort of part of my query. The other part is that my shipping costs are in USD while I pay my vendors in various other currencies. Is there a workaround for this?