Our nonprofit gives away all inventory for free. We need to track quantities on hand and report who received what. Setup as invent or non-invent items? How to record?

Hi there, lubyluanne.

Welcome to the QuickBooks Community. I'll be providing information on how donations work in QuickBooks. Then, to ensure that you can record them smoothly.

When a nonprofit gives away all inventory for free, how you record them depends on the type of offer have been made. Recording a donation of products or services that you normally sell is different from recording a cash donation. 

To start recording a product and service that gives away for free, you'll first need to make an invoice. This is to ensure that you can record the income. Then, create an account to use to record charitable contributions. Beforehand, I suggest consulting an accountant to make sure your records are in shipshape. They can provide suggestions on how to properly handle the inventory items that have been shared.

Here's how:

1. Go to the Gear icon ⚙.
2. Choose Chart of Accounts. Then, click New.
3. From the Account dialog, select Expenses from the Account Type dropdown list.
4. Choose Charitable Contributions from the Detail Type dropdown list.
5. Enter a Name for the account. You can use Charitable Contributions.
6. Click Save and Close.

Once done, create a product/service item for giving contributions/inventory. You can click this article to see the instructions on how to complete the process: How to record donations or charitable contributions. This also contains the next steps that need to perform so you can record the transactions accurately. Please know that tracking Inventory items is only available in QuickBooks Online Plus and Advanced.

Lastly, you may refer to this article to view details on how you can enter a sales receipt and create a bill for the donation so you can mark the bill as cleared: Set up and record in-kind donations in QuickBooks Online.

Let me know in the comment section below if you have any other questions about recording donations or giving inventory, lubyluanne. I'm always here to help. Have a great day ahead.

Let me clarify, we aren’t “donating” inventory either. We simple distribute it but would like to track where it goes. Do I setup all items as non-inventory? If so, how do you track use of those items?

Hello, lubyluanne@gmail. 

Let me share some insights on how non-inventory items work in QuickBooks. 

Non-inventory items refer to other types of items, such as those that are special ordered, drop-shipped to your customer or the materials or parts you buy and sell but don’t intend to keep inventory on hand. 

If you want to know where we can enter a non-inventory item, I'll show you how.

1. Go to the Sales menu and select Products and services.
2. Click New then, choose Non-inventory.
3. Add the name of the item.
4. Choose the category that best describes the service item from the Category dropdown.
5. Fill out the rest of the fields as needed.
6. Once done, select Save and close.

You can refer to this article for more details: Add product and service items to QuickBooks Online.

Additionally, you may visit this article as a guide on how you can track your products and services: Set up and track your inventory in QuickBooks Online. 

Please reach out to us again if you have other questions or concerns. I'll be around to help. Stay safe!