Totally agree with you that QBO has some serious BASIC improvements to make vis-a-vis inventory AND a whole bunch of other sections. I was not in the company when they chose QBO and am now stuck with it but am seriously looking to change that. Did you find some other, I was going to say comparable, BETTER software to manage your books? Frankly, I have had enough of QBO's vague replies and stupid excuses. Not sure if you are using multiple currency but the way multiple currencies are handled could not be more moronic. It's backwards accounting and work-arounds have to be used continuously. Less than ideal. A better product HAS to be out there...

Hello QBO team,

I received an inventory bill, the price of which is different from the price in the system. How can I match with the bill without creating a new inventory item? For example, the price for inventory item A is $150 per bag in the system, and the new purchase price is $200 per bag. If I choose item A when I book the bill, then the total won't match with the bill. How should I book this inventory bill? Also, If I change the price of item A to the new price $200, will QBO automatically pick up the new price and update the inventory using an average price such as (150+200)/2 =$175 per bag? 

Thank you!

Also, is QBO able to do the following?  

"Combine your inventory items to build finished goods"

Hi there, @Lisa H8. 

I'm here to help you with your inventory concern.

QuickBooks Online (QBO)  tracks inventory using the first-in, first-out (FIFO) concept. You'll want modify the item cost so that the correct rate will be applied to the next bill.

Here's how:

1. Go to Settings ⚙ and select Products and Services.
2. Highlight the item, then select Edit from the Action column.
3. Choose Starting Value.
4. Select Got it.
5. Enter the item's correct quantity and cost.
6. Click Save and Close.

You can check out sample scenarios in this article: What is FIFO and how is it used for inventory cost accounting?

With regards  to your second question, combining inventory item to build is only available in QuickBooks Desktop. In the meantime, you can utilize the inventory bundle in QuickBooks Online. 

For your additional reference, please visit this article: QuickBooks Online: inventory bundles.

All you need to know about tracking your inventories in QBO can be found in this article:

• Set up and track your inventory in QuickBooks Online
• Add inventory products in QuickBooks Online

I'd also recommend you consult an accountant for additional guidance in making these changes to ensure the accuracy of your accounts.

You can also run reports to see your sales and inventory status in QBO.

Get back to me if you need help with managing item costs in QBO. I'll be around to answer them for you. Enjoy the rest of the day!

My question in regards to receiving inventory hasn't been answered. We create a PO for most orders. When the item physically comes in it arrives at a remote facility where the packages is opened, the ite(s) counted and the serial number logged. However, our warehouse facility does not receive the invoice, that is sent to the location where the accounting happens. 

1. If the person receiving the item were to go to the PO, there is no option there to show that the item was received other than to "create bill". The result is a bill is created in the accounting system but no actual bill has been received (entered) into the accounting system.

2. This creates a problem since an invoice (bill) will eventually be received from the vendor but the accounting system will already have a bill entered opening up the possibility that a second bill will be entered.

3. There should be a step (receiving report) in between that will sow the item being entered as received but not showing a bill to be paid. 

How can this be done. Every company I have ever worked for has this step in inventory management. It allows for an audit trail showing who received the item, a serial number, if applicable can be added and tracked at a later date if necessary and removes the confusion regarding bills and whetere there is an actual bill form the vendor or a fake bill entered to satisfy the need to show if the item was received or not prior to payment of the bill.

This seems like a very simple and essential step in the accounting process. Anyone have a suggestion here? 

We have found no solution, QBO is not currently capable of properly handling this very basic inventory management process. 

EXACTLY!   When goods are delivered, they rarely get an invoice.  The receiving department gets a packing slip.  No prices, just quantities.  That person should not have access to AP , should not be creating bills .  Come on QBO..

My company hired Ernst & Young to help with this.  We created an account called "Invoices to Come" to deal with this.  When goods are received, a Bill is created by the Receiving team that Increases Inventory (by Product, linked to a PO) and a corresponding amount is entered within the same Bill to "Invoices to Come" so the Bill shows as a $0 Bill.  *Note that everything in a Bill represents a debit since the credit is A/P, so you have to enter a negative "Invoices to Come" (negative debit = a credit) amount to offset the Inventory.  The increase to Inventory and increase to Invoices to Come in the Bill net out to a zero dollar Bill so A/P is not affected.  We record this with a Bill # that starts with GR so we know it's a Goods Received Bill vs a real Bill.  So Inventory is debited and a liability is credited as it should, just not A/P.  When we receive the real Bill, we enter a new Bill as usual, but use "Invoices to Come" (positive amount entered this time) to offset it.  So it'll debit Invoices to Come and credit A/P.

OK, I see how that would work and I will take a look at implementing that procedure. Of course, the obvious question, at this point, is why doesn't Intuit simply include this feature with the QBO software? If this were built into the software it seems that it would require fewer keystrokes and less thought on the part of the data entry person. Somehow, I was told once that easier and simpler was the objective of software. For what I am paying monthly for the privilege of using QBO software they could shell out a few $$$ and hire Ernst & Young to consult on this since the QBO engineers apparently can't figure out how to code it on their own. 

Good information! Thanks for responding. 

Yah, Quickbooks Desktop has that feature, but sadly, QBO doesn't.  QBO doesn't have near the full capability that QB Desktop has.  Every time I searched for a feature that I know QBD had, QBO told a user to make a suggestion for the future...

Hi there,

Thank you for your responding. Now I feel comfortable to change the price for item A. However, the real issue is that item A was added after the PO was created and the bill was received, and the old item which was used in the PO and bill was deleted when item A was added. When I recorded the bill, QBO does not allow me to post bill if I choose item A. The message says "Select  a date that's after the date you started tracking this inventory item".  The bill date is Dec 11 2022 and item A was added  in Jan 2023. Is there a way to book the bill to  Dec 2022  and record the  correct cost of inventory item A? Any suggestions that can resolve this issue would be welcome. Thank you. 

Thanks for sharing!

Hello SoundCon,

I might not fully grasp what you're saying, but I have just learned how to receive inventory into QBO, while leaving time before the bill is paid. 

1. Create a new vendor bill

I added a PO that I made earlier with a large quantity of items.

2. Enter the Invoice number into the Bill Number box, and the date into the Bill Date Box, Fill Term Box (Net 30, etc)

3. Once my cost on the PO match the invoice, I select Save and Close. 

The items now show in my inventory, ready for sale!

4. navigate to Dashboard > Pay Bills

Your bill should be sitting there ready for you to pay whenever you get to it!

In our business, I pay via my bank's Bill Pay option and then just mark the bill as paid with the payment date matching the bank statement. I clear out the "Starting Check no." field" and hit save and close. I repeat this process for each Bill seperately.

I hope this helps, and if not, best of luck as you find your way through the QBO mess! 

We developed a workaround to this.

When we receive, we create a bill using PO XXXXX This is the QB PO number with PO in front of it - so if your original Purchase order number was 12345, we create a bill and use  PO 12345 as the invoice number.

Then, when the actual invoice arrives, you just enter the "12345" in the search bar. it will pull up the bill with PO 12345 (as long as you left a space between PO and 12345).  Now, we compare the receiving bill with the actual invoice to see if it matches. If it does, we update the PO 12345 with the actual invoice number.

Now we know the invoice is matched and ready to pay.  If it does not match, we enter ** in front of the PO 12345 so we know there is an issue that needs to be resolved prior to paying.

It's not perfect, but it allows us to have more real-time inventory and understand what is on our floor prior to invoice.

Hope that helps

Hi, @nriordan.

We appreciate proactive users like you who are willing to share their knowledge to help others. The workaround you've provided can help other users who are experiencing difficulties when receiving or managing inventory data in QuickBooks Online.

If you have other insights or concerns, please feel free to leave a comment below. Stay safe!