How do i receive inventory from purchase orders

Agreed, QB Online stinks and is difficult to navigate, especially the Reports, compared to the Desktop version.  It is not user friendly and the naming of reports was changed (which makes it more difficult).  I'm not sure what the benefit is on QB Online v Desktop is but I much prefer the Desktop version.  

I am still unclear about when the inventory is updated and how we ensure that inventory corrections are made.

I understand that process as follows - please correct anything I have got wrong:

1. We raise a PO in QBO and send to vendor.
2. We raise a Bill to match one or more POs.
3. Vendor makes full or partial shipments against each PO.
4. We check packing slip against PO. Vendor may also notify on packing slip items unable to be fulfilled. Vendor may have issued some items short of or over the number we ordered. What action should we take in QBO at this stage for each of these variations?
5. Vendor sends an invoice which may be for an entire PO or for one or more partial shipments. This includes shipping cost for items covered by that invoice.
6. We add the shipping cost to the related Bill in QBO. Each Bill may end up with several lines for shipping cost.
7. We pay the invoice and apply it to the Bill. Even when that vendor has completed all shipments for a PO, the Bill total may not match the total of all invoices (usually the total of all invoices will be less than the Bill total.

(Note that I have not included a reference to the situation where a packing slip is incorrect as obviously we talk to the vendor and sort out how to resolve it.)

Once we know that the vendor has finished issuing invoices against a PO and all invoices are paid, QBO still shows an outstanding amount due on each Bill. Presumably there is also a discrepancy between the inventory added in accordance with the Bill and the actual shipments received (on packing slips). How do we ensure in QBO that the inventory adjustment, the PO, the Bill and the goods received all match at the end?

Thanks in advance for any explanation and advice. This is causing a lot of stress because it is over 6 months since taking over the accounting for this and Bills are not being cleared and Inventory is going out of whack!

Hi @briton,

Allow me to clear things up for you and share how this process works.

Your inventory gets updated right after you mark a bill with the inventory items as paid. To ensure that its correctly updated, I suggest making changes to the bill you've created from the initial PO. Base your changes from the invoice your vendor sent you, including shipping costs.

With this, you won't have any issues with your inventory since the update will depend on the actual items you've received from your vendor. The bill will also close without any discrepancies since the total amount you paid for matches with the invoice you received.

Further details on inventory management by buying and selling products is in this article: Buying and selling inventory.

I'll be here to provide further assistance. Should you require it, drop me a comment below and I'll get back to you.

Thanks Ryan.

So if I understand you correctly:

1. We shouldn't create a Bill when a PO is raised, or when we get items delivered, but only each time we get an invoice (which is ALWAYS later than the shipment delivery).
2. We can't use the system QBO provides of either (a) creating a Bill from a PO or (b) creating a new Bill and adding the POs which QBO offers from available ones. Those methods would only apply when we have a PO which is shipped to us completely filled and where the vendor's invoice shows the same items and quantities.

So unless we get a perfectly matched PO against deliveries and invoice, what you are saying is that we need to enter each item/quantity on an invoice in a newly created bill and merely annotate which PO it is a partial fulfillment of.

Did I understand your answer?

Thanks for getting back to us, @briton.

You can create a bill from the PO each time you receive a shipment according to inventory received. Used the Copy to Bill from the PO and reduce the QTY of items if you received partially delivered items, this way it will update the PO's open items.

Also, you can still use the feature as the PO in QuickBooks Online (QBO) will update each time you do a Copy to Bill and let you track how many inventories remained undelivered.

Once you received the invoice from the vendor, you can run the Purchase by Vendor Detail report to match the items that were billed and what was invoiced.

Here's how to run the report:

1. Go to Reports from the left menu.
2. Type in Purchase by Vendor Detail.
3. Set the date and click Run report.

Also, just in case you want to adjust your inventory, please refer to this article for the detailed steps: How to Edit an Inventory Quantity Adjustment.

Let me know if you have other questions. I'm always here to help. Have a good day!

So, when you receive a PO and create a bill, the inventory is not added to the register until its paid?

Thanks for joining this conversation, DKolb.

To answer your question, when creating a bill from a purchase order (PO), the quantity of the item in that transaction will be added in the inventory (Products and Services) list automatically. It will also be posted in the expense and accounts payable account (AP). Once the bill is paid, that the time it will be posted in the bank's register.

For additional resources, consider checking out these articles:

• How to use purchase order.
• Apply a purchase order to a vendor transaction.

• How to pay bills in QuickBooks Online.

Please reach out to me in the comment section below if you have any other issues or concerns. I'm always here to help. Have a great week!

Thanks for the response! I am trying to figure out how to automatically add inventory received from a purchase order. Does QBO do that?

Good day, @davidkolb.

As of the moment, your inventory items from a purchase order won't automatically be added to your item's quantity on hand. This is because your purchase order is a non-posting transaction. Thus, it doesn't affect the quantity of your items and in any of your accounts.

With that being said, you can consider copying your inventory items from a purchase order to a vendor transaction once you received them. This way, QuickBooks will automatically add the quantity of your inventory items to your current inventory count. To do so:

1. Go to the Plus icon.
2. Under Vendors, select Expense, Check, or Bill.
3. Select your vendor who sent you the purchase order.
4. On the lest selection panel, find your purchase order.
5. Select Add.
6. Click Save and close.

Additionally, here's an article you can read to learn more about how you can add your purchase order to a vendor transaction: Apply a Purchase Order to a Vendor Transaction.

Lastly, I've also added this helpful article that'll guide you in identifying and finding your purchase order transaction: How to Run Purchase Order Reports?

If there's anything else that I can help you with, please let me know ion the comment section down below. I'll be always around ready to help.

Mine is not so simple. I want to receive inventory from a purchase order I created. When I follow your instructions (Action, Copy to bill, Save). I cannot input the quantity I am receiving. Doesn't allow me to do so. Also, I need to add tariff and inbound freight to get my true cost. Do I have to add this percentage to each item manually?  Would that show on the bill? Will these additional costs show on my vendor bill when I make payment? I hope my question make sense.

Of course, your question makes sense, Tom. Let's review the details you need to change and add to your bill.

There's no restriction in editing the item quantities. When you copy the purchase order to a bill, it will take you to the Bill page where you can change their quantities. Is there an error when you try this step?

As for the tariff and freight, you can create items for each and assign their corresponding expense accounts. Then, add them, like how they are shown on the actual transaction. If their amounts are in the percentage formats, just get the converted values and them to your bill. And yes, they will be included in your bill payments.

Let me know if you still need help with your inventories.

I am using Desktop PRO 2018, 2019 & 2020.

I do not see the "ACTION" pull down menu. Where is it located

Hello there, @LCecchini. I'm here to ensure you're able to receive inventory from your purchase order in QuickBooks Desktop (QBDT). This way, you can keep track of your inventory and record them accordingly.

The steps provided above are for the online version of QuickBooks. That's why you're unable to locate the Action pull-down menu. With QBDT, you can receive inventory with or without a bill after you record a purchase order. This way, your quantity on hand for each item and the payable to the vendor will be updated. Let me guide you how.

1. Go to the Vendor menu.
2. Select Vendor Center.
3. Click the New Transactions drop-down.
4. Choose either the Receive Items and Enter Bill (Receive inventory with a bill), Receive Items, or Enter Bill for Received Items (Receive inventory without a bill) option.
5. Fill in all the necessary details needed.
6. Click Save & Close.
7. When you're ready to pay the bill, proceed to Pay Bills. Then, go to Entering bills against Inventory when you receive the bill for the inventory.

I've attached a screenshot below that shows the third and fourth steps.

You can also refer to this article for the detailed steps: Receive inventory.

Receiving inventory is part of your usual A/P workflow in QBDT. To see the complete list of workflows and other vendor-related transactions, refer to this article: Accounts Payable workflows in QuickBooks Desktop.

Let me know how it goes in the comments below. If you have other concerns about receiving inventory items, purchase orders, and vendor-related transactions, I'm just around to help. Take care always.

I noticed you said the inventory gets updated once the bill is paid. How does that work with charge accounts?  We typically have 30 to 60-day terms with our vendors, but would like to have the inventory updated when we receive the items, rather than when paying the bill.

I'm here to share some insights about this, PrestigeLock.

In QuickBooks Online, the item will be added automatically to the Products and Services list after creating a bill from a purchase order. 

For QuickBooks Desktop, you can receive inventory without a bill after you record a purchase order. 

Here's how:

1. Go to Receive Inventory dropdown, then select Receive Inventory without a bill.
2. On the Item receipt window that appears:
1. From the dropdown, choose the vendor name.
2. Select Yes to receive a purchase order for the bill.
3. Choose the correct PO, then select OK.
4. Review the information on the Item Receipt. Note that except for the Memo field, any fields that were filled in on the PO are carried over to the Item Receipt.
5. Select Save & Close.
3. When you receive the bill for the inventory, proceed to Entering bills against Inventory.

For further guidance with the process, please see this article: Receive Inventory.

Once you record what you owe to your vendors in QuickBooks Desktop, you can now pay your bills to settle your payables. Please see this article for QuickBooks Online.

Please do let us know if you need further assistance in managing your vendor transactions and inventory. I'm here to help you out. 

While Charlene's solution is nice, it misses an important point. If you manually enter inventory receipt, you are missing a useful feature of Quickbooks. Anyway here's how we do it - you might want to try it:

• When we receive the inventory, we check the items received against the packing slip.
• We contact the vendor to correct any discrepancies
• In Quickbooks from the Purchase Order, we "Add to Bill" to create a new bill which will match the packing slip and correct the Bill to match the packing slip as corrected for items actually received.
• In creating the Bill, the items received are automatically added to the inventory.
• When we get the invoice, we "send payment to the vendor and in Quickbooks "Pay Bill"

This fully uses the automation feature of Quickbooks for inventory control. It's simple and does not require any manual corrections or entries for almost all of our inventory receipts.

I am using QB Online.  

Is there a definitive How To Video, recommendations for a third party product, that better assist this process of Receiving Inventory for a business where we receive back orders, constantly?  I've read multiple threads and jeez... really?  One 'How To' template that nails it should be created.  QBO is very limited.  Small business owners don't have time for adjusting inventory reports, etc.  I've used Enterprise and thought QBO was a less expensive and had the requisite suite of features to run your business--- At this point I am looking at Zoho.  Also, Intuit, (I am in the South Bay) -- are you driving a business model that requires third party applications because while QBO accessibility is great for remote teams, you need to crank up the usability studies and listen to folks a bit more.  (I've been trying to get the Sales Order feature for over 3 years.)