Will quickbooks desktop track inventory?

More specifically, all desktop versions have inventory

I have QB Desktop Pro 2017 - when adding a new item, the only choices offered are: service, non-inventory part, other charge, subtotal, group, payment, or discount. I bake crackers and want to keep track of those crackers once they are bagged. How do I do that? I don't see how it has tracking capability? Ideally I can add all the ingredients for this product and then QB reduces inventory for the ingredients automatically. Can it do that?

Menu Edit> Preferences>Items & Inventory>Company tab check mark that inventory & purchase orders are active, when you create the first inventory item, QB will create the inventory asset and COGS accounts.    

Yes it could, but you would go crazy trying to keep up with it.
QB does not handle waste, and trying to track a pinch of salt <smile> is impossible
Best to post all purchases for the ingredients to COGS, and use a service type item for sales, that also means you do not have to track sell by date and do inventory adjustments.

Thank you! I was able to turn on the inventory tracking at last! But you're right - that would probably be very cumbersome to keep track of that pinch of salt... . I am new to QB and have't set up anything except payroll; don't want to make mistakes that will haunt me later. Let's say to make crackers I use flour, salt, seeds, water. Would I set up each item in the inventory as 'non-inventory' and for each of those I choose COGS as the account? I need an accurate cost for making the crackers so I know how much to charge when I sell them. Can I even account for the water? Can you further explain the 'service type item'?

Have you set up an Assembly for each type of cracker you produce?  That would be the best way.  Each component would be an inventory part.  Set up an assembly for the recipe including the packaging and a new inventory item for the packaged crackers, either by package, box or carton however it comes off the line.  I would define the inventory card and set up a separate GL account for Finished Goods Inventory thereby separating your raw material inventory from your finished goods product.  

The cost of the packaged product will be the accumulated costs of all product used in your assembly.  You will need to assign the sales amount.  

Keep in mind you do not want to record your purchases in Cost of Sales.  Your purchased inventory needs to be posted to a GL Account called Inventory in the Balance Sheet.  When you sell a given product the entry will be a double sided entry.  Cash debit, Sales credit,  along with the following entry Inventory credit, Cost of Sales Debit.

This Generally Accepted Accounting Principle results in maintaining a perpetual inventory system rather than a periodic system where you have to adjust purchases and inventory at the end of the month.

I am direct sales. No assembly. I want to be able to enter my current inventory and as I sell either import or enter the items that sold and have the sold items subtracted. Perfect work I would be able to get a report telling what items I would need to reorder. I am currently using square as my register. I use the square for every sale at the show it gives my the total of the sale and after the sale reports. I believe that QB & square are not compatible. I visited with a vendor that was using the intuit product for credit cards but I did not asked if it was for cards only or if she entered all sales. I am planning to take a couple QB classes but spoke with a few people that had taken the same course they said inventory was not discussed.

Yes you can enter the purchase of products as inventory
when you use an inventory item on a sales receipt or invoice, the qty reduces by the number sold, and the cost of that QTY posts to COGS, while the invoice amount posts to sales

Square and QB integration can happen, I use square but do not, have not tried the integration since my POS software handles my inventory for that business so I can not speak to the effectiveness of that integration.

Thank you for your answer, makes me feel better that this may be the product I have been looking for.

You're Welcome

@ rh
Your approach works in manual accounting using journal entries, but it does not work in QB if you use inventory items.

@ President

Do not create a balance sheet account called inventory - QB did that for you and it is a special type of account that QB likes to use. Do not set up a second inventory account, there is no reason to, and it usually leads to problems and issues later on.

You do not, ever, use a journal entry for inventory or inventory items - never.  And you never use inventory asset in a transaction of any kind either.

Gaap is not a required standard unless you are listed on the market and subject to the SEC regulations, and the IRS does not accept all of the so called gaap standards.

There is no required inventory valuation or tracking method, periodic and perpetual are both fine and accepted

This is a wasted explanation since you marked this as using pro - pro does not have the assembly item.  Premier does, but.

In QB an assembly item is a finite relationship.  a number of different things make one of something, each and every time, no waste no variable outputs.  If you can say that a measured amount of each ingredient always makes exactly 100 crackers with no waste, and no broken ones, then you might be able to use an assembly item - but I would not.

If you choose to do so (which means buying premier), keep in mind that an assembly item makes one of something. so if you use 10# of flour to make 100, you need to stock the flour in ounces and calculate how many ounces it takes to make one cracker.  Doing the same for every ingredient.  And it gets worse, you can use a decimal amount that does not add to one or inventory goes way off.  decimals like 0.125, 0.5 are fine, but a decimal of 0.33 or 0.85 is not.  Then in build assemblies you build 100 of the cracker assembly.

You can use a work around, but it is a pain
Buy and stock your inventory items, no you do not stock water that is a utility you pay for and is expensed already.
create a bank type account called work in progress (WIP)
use inventory adjust, set the adjusting account to the WIP bank account and lower the qty of the item you will use - that moves the cost of the items to the wip bank.
Make your crackers in real life, when you know how many you have that can be sold
use write checks on the WIP bank account, do not print the check it is just used for data entry, select any vendor or create a dummy for this purpose, list your cracker item, enter the qty you actually made, and in the total item cost block enter the full amount in the wip account, save.  The stocks the inventory item cracker with qty and cost per each.  You use that item on a sales receipt or invoice to sell it

when you do that, QB makes the required entries for income AND COGS - you do not have to make double sided items.

@Rustler - Tips & Tutorials

Whatever!

Let me tell you my process never said make a journal entry - the invoices take care of that.

Assemblies work fine and a perpetual inventory system is an acceptable methodology and much cleaner than a periodic inventory.

then my apologies, I based that comment on this statement which implies a user makes the entries
>> the entry will be a double sided entry.  Cash debit, Sales credit,  along with the following entry Inventory credit, Cost of Sales Debit.<<

Thanks it works very nice.  We produce Jerky in sticks, bags and packages in different quantity boxes.  One caution is in setting up units of measure which has to be thought through.  I produce boxes with 180 jerky sticks in caddies of 30 sticks each.  If I sell a case no problem but then i have fractional amounts when I sell 30/60/90/120/150/180.  Get a little messy.  But inventory is really easy to maintain.

a non partisan comparison of QBO vs QB desktop
http://onsale-apparel.com/Rustler/qbo-or-qbdt 

Fishbowl Inventory is a companion software for Quickbooks that does EXACTLY that. We use it for distribution. We buy chemicals in large sizes and then sell smaller sizes as customers require. When we create the smaller bottles, the inventory we use (material, bottle, cap, label) are assigned in a bill of materials. Inventory is deducted from the larger container when used to create smaller bottles. It really works great. 

From what I'm reading, all QB desktop versions let you track inventory.   I seems the desktop 2019 pro trial version gives you a choice of services or non stocked items.  What version pf desktop allows you to stocked sku s , cost vs price, % markups, etc?

Greetings, @ejzipp.

 

Thanks for joining this conversation. I can share some information about tracking inventory in QuickBooks Desktop (QBDT).

 

Yes! You're correct. All QBDT versions will let you track inventory. But QuickBooks Desktop Enterprise is the only version that has a subscription-based feature called Advanced Inventory and Advanced Pricing.

 

With Advanced Pricing, QuickBooks automatically changes the prices of items on sales forms according to rules you create. This will also allow you to offer quantity discounts. On the other hand, Advanced Inventory enables you to use:

 

• FIFO costing.
• Multiple location inventory.
• Bar code scanning.
• Bin or lot tracking.
• Serial or lot numbers.
• Sales order fulfillment process (Site Operations).

 

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

 

• Use Advanced Pricing.
• Turn on Advanced Inventory.
• Set up Advanced Inventory.

 

That should answer your concern for today. Please know that I'm only a few clicks away if you have any follow-up questions. Take care and have a good one.

Dear all. QB desktop pro 2021, handle inventory? Can I do track my inventory?

Thank you for reaching out to the Community for support, Cosmotuna77.

 

Yes, as mentioned by my colleague above, all QuickBooks Desktop versions offer inventory tracking. To utilize the feature, all you have to do is turn it on so you can then manage your inventory. 

 

To turn on inventory tracking:

 

1. Go to the Edit menu, select Preferences.
2. From the left pane, choose Items & Inventory then go to the Company Preferences tab.
3. Check the Inventory and Purchase Orders are Active box.
4. Select the Advanced Inventory Settings button. If the button is grayed out even though you have purchased the feature, you will need to sync license data online so that QuickBooks recognizes it.
   1. In QuickBooks, select Help then Manage my License and then Sync License Data Online.
   2. Check that Advanced Inventory Settings is no longer grayed out.
   3. Close and re-open the QuickBooks program.

I'd also recommend checking out these links to learn more about it:

• Turn on Advanced Inventory
• Set up Advanced Invent

In addition, I've added this link about the new and improved features in QuickBooks Desktop and Enterprise 2021 for more details.

 

Keep on posting if you have other questions about inventory or any QuickBooks related concerns. I'm always here to help.

@Cosmotuna77 

All QB Desktop edition has the inventory feature. But for some specific features (e.g multi warehouses), you have to use QB Desktop Enterprise Platinum or a 3rd party inventory management app.

Hello, I'm curious if you ever figured that out. I want to be able to enter in all items and have a start inventory and then as I invoice, it automatically comes off of inventory but not sure quickbooks does this. 

It's nice to have you here, @jlavoie893,

 

All version of QuickBooks can track inventory. At the same time reflect the inventory method to deduct quantity once the items are used for sales transactions. May I know which version of Desktop version are you using? 

 

The process starts with turning on inventory management in the company file preferences. Here's how:

 

1. From the top toolbar, select Edit then Preferences.
2. Select Items & Inventory and tap the Company Preferences tab.
3. Make sure the Inventory and purchase orders are active is selected.
   
4. Press OK when done.

Next, create an inventory item you want to track. Here's how:

1. Go to the Lists menu then Item List.

2. Right-click anywhere and select New.

3. For the Type, select Inventory Part.

4. Enter an item name or number. What you enter here is displayed in the drop-down list of items when you're filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

5. If this item is a subitem of an existing item, select the Subitem checkbox and choose the parent item.

6. (Optional) If you know it, enter the manufacturer's part number and unit of measure.

7. Fill in the Purchase Information and Sales Information fields.

8. Complete the rest inventory information then press OK.

You can also import the items manually. Refer to the links below for the instructions:

• Export, import, and edit IIF files
• IIF Overview: import kit, sample files, and headers

 

Once you have your stocks set up, create your invoices using the steps below:

1. On your keyboard, press Ctrl + I to open the invoice window. You can also go back to the Customers tab and choose Create Invoices.
2. Enter the inventory items and the corresponding quantity sold. Assigning the quantity will determine the total items deducted in stock.
3. When done, click Save and Close.

Please check these handy links for your guide with QuickBooks Inventory:

 

• Accounts Payable workflows in QuickBooks Desktop.

• Receive inventory.

Feel free to let me know if you have other questions. I'll be more than happy to answer them for you. Have a nice day!