Product and services

When you add products and services to QuickBooks Online (QBO) for your café, you'll encounter several columns you must fill out. Let us guide you through the process and explain each column, Imashi-Gunawardhana.

Here's a breakdown of what each column means when adding a product or service and how you can fill them out appropriately for your café business:

1. Go to Sales, then select Products & services.
2. Select New and choose Non-inventory or Service.
3. Enter a Name for the product or service and an SKU, if you track them.
4. From the Category ▼ dropdown, choose the category that best describes your product or service. 
5. If you sell the item, confirm the checkbox is selected for I sell this product/service to my customers. (If you don’t sell the product or service and want to track how much you spend on it, go to Step 2 below and start at item 3.)
6. In the Description on sales forms field, enter a description. This is what your customers will see on their sales form.
7. Enter an amount in the Sales price/rate field. Note: If you charge a variable rate for services, you can leave the Sales price/rate field blank. Then add the price when you fill out the invoice or sales receipt.
8. Select the account you want to use to track the sale from the Income account ▼ dropdown. You can use an income account QuickBooks has already set up for you, or select + Add new to create a new income account. 
9. In the Sales tax section, sales tax is applied by default based on location. For more specific options, or to make the product or service nontaxable, tap Edit sales tax.
10. Then do one of the following, depending on the product or service:
    • If the product or service is tax-exempt, select Nontaxable. Then select Done.
    • If the item has a special tax rate, use the Search field or Browse all to find and select a more specific product or service type. Then select Done.
11. When you're done, press Save and Close.

To learn more about this one, check out this article: Add product and service items to QuickBooks Online.

For a café, you’ll primarily deal with both inventory and non-inventory products. Food and beverages that you prepare might be listed as non-inventory while pre-packaged goods for resale would be considered inventory. After that, you can now proceed with creating invoices.

In case you need to change or edit the income account for a product or service item in the future, refer to this article for the detailed steps on how to do it: Change the account for a product or service item in QuickBooks Online.

Lastly, consider using our QuickBooks Live Expert Assisted service, which provides personalized guidance to help you stay organized and efficiently manage your business finances.

The Community always has your back if you need additional assistance managing your products and services items or any QuickBooks-related concerns. We are always here to help, Imashi-Gunawardhana.

How should the item type be classified under products and services? What should be the basis for this classification in relation to a café? If I need to add food items to the products and services list, what would be the appropriate item type for café-related sales?

What is the correct expense account to use for café sales when categorizing products in the product list?

My company started in 2022 as a café business, but during that time, transactions were not properly recorded in QuickBooks. I recently joined the company, and I’m now working on organizing and streamlining the financial records in QuickBooks Online. The new financial year has also just started on April 1st, 2025. Could you please guide me on how to begin recording transactions correctly and how I can set up an efficient process moving forward?

Hi Imashi. Allow me to give you ideas in managing transactions in QuickBooks Online (QBO).

If you choose to continue with your existing QBO account, you'll need to identify the transactions that were not recorded properly and correct them. This step ensures your financial records are precise. After correcting these entries, you can close your books and adjust your fiscal year to start on April 1.

You can also consider acquiring a new QBO account to start from scratch, establishing a clean foundation for your business records.

For additional detailed instructions on beginning with QBO and how to set up and sustain your account, please refer to this article: Getting started with QuickBooks Online.

Additionally, you can also get a brief overview of your business by generating reports. For further insights, please check out the article: Run Report in QBO.

The Community team is available 24/7 to assist you with all QuickBooks Online features, especially transaction management. Just comment below, and we’ll provide prompt assistance.