Non Inventory Account where to group in Chart of Account for double effect ?

When you say, Non-Inventory Account, are you referring to setting up a Non-Inventory Products/Services? Inventory is tracked as an Asset on your Balance Sheet. The cost of the inventory items are not recorded until they are sold. Non-Inventory Items are tracked as a current cost (Cost of Goods Sold) and they are recorded on your Profit & Loss statement when they are purchased. You will only see the cost of your Non-Inventory items on your Profit & Loss statement after the items associated with them have been sold.

Hi I am having a similar problem, however when I sell a non inventory item or a service, the cost are not charge on the Journal Report. Do you know how can I fix that?

The sale of an Inventory Item results in Three Lines:

Asset (inventory goes Down by the Cost Basis on hand

COGS goes Up by that same amount

Sales is seen for the Gross sale.

That would be three $1 lines in the attached image. They are not bracketed properly for what actually happened.

Then, Noninventory is never carrying a Cost in the sales transaction. That is only the Sales amount. The Cost amount is from any Purchase you entered where you used that same Two Sided item, so that you can relate that same Noninventory item from its own purchase (and Job Tracked to that customer, if that was a direct and specific purchase just for their sale) and then the Sale of it gives the income and the ability to see Profit for that Service, Noninventory or Other Charge type of activity. The profitability of the inventory item on sale is revealed in the sale journal. The others are Not seen here; they are only showing Sales Revenue as the gross.

And this only works if you are using a QB program that allows you to make the Service, Noninventory and Other Charges as Two Sided and you specifically show you both Buy and Sell this, so that there is the Expense account link and the Income (or reimbursement income) account link = Two Sides.

That's not a problem. That's how the non-inventory item or service items suppose to work in QuickBooks. In QBO, only the "inventory asset account" (as a default Inventory Detail Type) will also show cost on a Transaction Journal report when creating a sales form. Usually, for all non-inventory or service items, you will record as COGS type or expense account. Even if you set up as "other current assets account type" on the Balance Sheet for these items, it will do nothing when you create a sales form. If you want to match cost with revenue, you will need to somehow reclassify to COGS from the other current asset account (if it's set up that way).

Non-Inventory Items are tracked as a current cost (Cost of Goods Sold) and they are recorded on your Profit & Loss statement when they are purchased. You will only see the cost of your Non-Inventory items on your Profit & Loss statement after the items associated with them have been sold.

When non-inventory items are set up, you choose an expense account.  When you buy a non-inventory item, I can see that the COGS expense account is increased.  Where does the corresponding double-entry post go?  What if the item is never sold, but only used in the production of other items?  I'm using Manufacturing & Wholesale, and I usually do an inventory adjustment to zero out the COGS accounts and burden the assembly items with the COGS such as these.

---

@cC5dnB5 wrote:

Non-Inventory Items are tracked as a current cost (Cost of Goods Sold) and they are recorded on your Profit & Loss statement when they are purchased. You will only see the cost of your Non-Inventory items on your Profit & Loss statement after the items associated with them have been sold.

 

When non-inventory items are set up, you choose an expense account.  When you buy a non-inventory item, I can see that the COGS expense account is increased.  Where does the corresponding double-entry post go?  What if the item is never sold, but only used in the production of other items?  I'm using Manufacturing & Wholesale, and I usually do an inventory adjustment to zero out the COGS accounts and burden the assembly items with the COGS such as these.

---

@cC5dnB5 

This is an old thread with mixed-up postings. It's a good idea to open a new posting to get a better answer from the QuickBooks Community.

Did you ever find a solution? I too do manufacturing. I use bundles but they contain about 35 items which seriously bogs down QBO. Multiple "My Experts" calls later, I was told QBO cant handle that much data in an estimate or invoice. So I am wondering what other manufactures are doing when they build an item out of multiple components to sell it. Would calling all the items in my bundles non-inventory items eliminate the lagging issues? If I create and invoice or estimate and I sell 3 or 4 bundles (each bundle containing about 35 items) I will have a growing lag in the program. Every time I move the cursor to another filed it lags.  It starts at a 30 second lag then builds to about 5 minutes. Some of my bigger estimates or invoices can take 2 hours to build. If I cant find a solution I'll need to find a new software solution. Manufacturing

Hi @Tshockley - did you get a response or find out what you need to do for your above post to make your entries for bundles/multiple items?

I purchased non-inventory items that I sell to customers. I sold some that are recorded to my income account but the entire purchase is showing up in my COGS on the Profit/Loss Statement. 

I set up the non-inventory item with a income account and my expense account is Cost of Goods Sold. I don't understand why the whole purchase price is showing on the Profit/Loss Statement instead of just what I sold.

Hi there, @Smedley.

I can share with you some insights about how non-inventory items are reflected in your report.

Basically, COGS is only affected by inventory type of items. It will only calculate under the accrual basis of your reports once the item is sold. For other types (non-inventory, service), the transaction will show up as the whole expense amount. At this time, you may update your item to inventory to track your report accordingly.

Here's how:

1. Go to the Gear icon, then select Products and Services.
2. Locate the item from the list, then click on Edit under Action.
3. Select Change type beside Non-inventory.
4. Choose Inventory.
5. Review the items (income and expense account).
6. Hit Save and close.

If necessary, delete and recreate the past transactions for an accurate result.

Here's an article you can read more about the difference between Cash and Accrual methods for QuickBooks Online.

Besides, you can open as your guide with managing your reports.

Please let me know how else I can help you with your reports or products/services. I'm always here to help. Keep safe!