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Super Explorer **

Inventory Tracking without cost or sales

Is there a way to track inventory without having it affect the accounting side of things? I just want to keep track of my on-hand inventory but not have it go through payables/receivables

 

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Best answer 12-06-2018

Accepted Solutions
QuickBooks Team

Re: Inventory Tracking without cost or sales

Welcome to the Intuit Community, dal1cas2.

 

At the moment, there isn't a way we can track inventory without affecting cost and sales. Inventory tracking is designed to track quantity, sales revenue, and cost of goods sold. 

 

If you wish to have this feature included in the next update, I encourage you sending this great suggestion to our product developers the the feedback feature in QBO. I'll do the same thing on my end.

Here's how:

  1. Click on the Gear icon.
  2. Click Feedback.
  3. Type in your feedback or feature request.
  4. Click Send Message.

We're always working on providing our customer the best product and service they deserve. We'll keep your suggestion in mind for future development plans.

 

If there's anything else I can do for you, or questions about inventory tracking in QBO, feel free to let me know. I'd be glad to help.

Established Community Backer ***

Re: Inventory Tracking without cost or sales

Of course you can track inventory without running it through AP or AR, and it doesn't have to affect costs or sales.

 

Let's take these separately: AP is only Enter Bill for something I did not yet pay for. You can list Inventory on the purchase as Check Expense or Credit Card Charge. This is how you show you bought something, with Quantity and Cost.

 

AR is part of Unpaid Sales. Inventory is not by definition Sales; it is by definition Stuff on hand. So, for instance, a machine shop or fabrication shop might need to track tool bits, saw blades and materials as Inventory for inhouse management, which is never what is sold. Perhaps you sell Trailers, and build them Custom.

 

So, you list Bar stock, square tubing, cut off blades, etc as inventory on Purchases. When you then Build that trailer to sell, you "Adjust inventory" to remove the Tubing and Bar Stock from on hand. You also Adjust inventory for removing new saw blades as they get placed in the machines.

 

And you would sell that trailer, as your revenue item. You would never sell inventory, in this type of operation.

 

I have a client that builds and tests rocket engines. They manage a lot of inventory, all for In House purposes. They sell Engineering Services.

 

12 Comments
Established Community Backer ***

Re: Inventory Tracking without cost or sales

When you purchase inventory it becomes an Asset of the business. When you make a sale from your purchased inventory it becomes a cost of goods sold expense for your business. Your inventory is tracked with "accounting", thus your inventory needs to be part of your accounting.

QuickBooks Team

Re: Inventory Tracking without cost or sales

Welcome to the Intuit Community, dal1cas2.

 

At the moment, there isn't a way we can track inventory without affecting cost and sales. Inventory tracking is designed to track quantity, sales revenue, and cost of goods sold. 

 

If you wish to have this feature included in the next update, I encourage you sending this great suggestion to our product developers the the feedback feature in QBO. I'll do the same thing on my end.

Here's how:

  1. Click on the Gear icon.
  2. Click Feedback.
  3. Type in your feedback or feature request.
  4. Click Send Message.

We're always working on providing our customer the best product and service they deserve. We'll keep your suggestion in mind for future development plans.

 

If there's anything else I can do for you, or questions about inventory tracking in QBO, feel free to let me know. I'd be glad to help.

Established Community Backer ***

Re: Inventory Tracking without cost or sales

Of course you can track inventory without running it through AP or AR, and it doesn't have to affect costs or sales.

 

Let's take these separately: AP is only Enter Bill for something I did not yet pay for. You can list Inventory on the purchase as Check Expense or Credit Card Charge. This is how you show you bought something, with Quantity and Cost.

 

AR is part of Unpaid Sales. Inventory is not by definition Sales; it is by definition Stuff on hand. So, for instance, a machine shop or fabrication shop might need to track tool bits, saw blades and materials as Inventory for inhouse management, which is never what is sold. Perhaps you sell Trailers, and build them Custom.

 

So, you list Bar stock, square tubing, cut off blades, etc as inventory on Purchases. When you then Build that trailer to sell, you "Adjust inventory" to remove the Tubing and Bar Stock from on hand. You also Adjust inventory for removing new saw blades as they get placed in the machines.

 

And you would sell that trailer, as your revenue item. You would never sell inventory, in this type of operation.

 

I have a client that builds and tests rocket engines. They manage a lot of inventory, all for In House purposes. They sell Engineering Services.

 

Established Community Backer ***

Re: Inventory Tracking without cost or sales

Materials that are used to build a finished good for sale can be setup as "Non-Inventory" parts and tracked in QBO as such. If I build a fence and sale it to a customer I would not charge them for the hammer and nails I used to build it with, but the hammer and nails would still be a cost of doing business, and I may still feel the need to track the inventory levels of my tools and supplies. If you purchase a good that you "resale" to a customer, this is a "Cost of Goods Sold".

 

Of course you "can" track inventory for business use outside of A/R and A/P. If you don't sell your purchased inventory, it does not become a sale and income for your business. If you do not sell products that you purchase for your business, the cost of those products do not become a cost of goods sold for your business. "Inventory" is NOT defined as "Sales". Everything we purchase or sale in the course of doing business has a value and should be "accounted" for accordingly.

 

If I purchase products that I use for research and development and sell information based on my findings, but don't sell any of the materials I purchased to perform the research, that does not change the fact that the materials I purchased were needed to perform the research and therefore become a "cost of services sold" when I sale my research findings as a "service".

Super Explorer **

Re: Inventory Tracking without cost or sales

How would I go about entering it so that it is just inventory and not sales? I tried to mark it as "Tracking" only but it would not allow it without giving it another identity as well.

Anonymous
Not applicable

Re: Inventory Tracking without cost or sales

Greetings, dal1cas2,

 

Thanks for looping in with the conversation.

 

To correctly track your inventory in QBO without affecting sales, you may refer to what Qbteachmt and Reginamarie have discussed above. The items you add will not be treated as sales unless you add them to your sales transactions.

 

In your case, you can create a custom income account for the products you're adding that should not be part of your company's revenue. To get help setting up the sales account for your non-sale inventory items, I'd recommend consulting an accounting professional. They can provide you with the best legal and accounting advice for your inventory management in QuickBooks Online.

 

Please feel free to reach out to me if you have any more questions with QuickBooks. I'm always here to help you whenever you needed me.

Super Explorer **

Re: Inventory Tracking without cost or sales

When I import the data into the Product & Services list, it will not allow me to select "Track" unless "Sell" is selected and it won't allow me to make "non-inventory" if "Sell" is selected? How would I go about tracking the product as non-inventory without affecting the accounting end of the business?

Established Community Backer ***

Re: Inventory Tracking without cost or sales

Under your "Company Settings", "Sales", "Products and Services", have you turned on "Track inventory quantity on hand"??

Established Community Backer ***

Re: Inventory Tracking without cost or sales

Because you want to use QBO to track non-sales inventory, you need to setup this non-sales inventory as  "Inventory" and not "Non-Inventory". 

Established Community Backer ***

Re: Inventory Tracking without cost or sales

 
Established Community Backer ***

Re: Inventory Tracking without cost or sales

If you have it on hand and need to track it as I described, for internal purposes, the "not as sales" means never Selling it. It isn't a question of the setup. It's a question of how you use that in transactions.

 

If you want to use Noninventory, then never set it up as Sold or "reimbursed." It can be an Expense item only. That isn't the same as tracking inventory for internal purposes only. The point of tracking anything as inventory is because it is on hand of significant value over time, and not already gone = cannot take it as expense.

 

Example: I buy 50 different Saw Bladed for that machine shop and they run $1,000 each and will last a year or two, but you never know when you would break one, so you want enough on hand to keep operating. You never sell them to customers, but your tool crib manager needs to manage them, get them on hand, keep a minimum level, and the IRS doesn't permit you to report these as Expense when they are still on the shelf. They are an inventory asset.

Established Community Backer ***

Re: Inventory Tracking without cost or sales

To add to this advice, the expense is taken when you make an "Inventory Adjustment", as the item is no longer sitting on the shelf. The inventory is an Asset, a Non-Sales Inventory Asset until it is used. If the Non-Sales Inventory Asset item is used to make a product that you sell, it becomes a cost of sales, a business expense. It has no sales price, but it does have a Cost when you purchase it and it becomes an Asset at the time of purchase. When you setup an Inventory item in QBO you can map it to a custom account.

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