Resell a software subscription with markup

I'll help you record these transactions in QuickBooks Online (QBO), @CM99.

We can create an inventory item for this type of transaction in QBO. This way, we can record its actual cost and its actual quantity together with its mark up price. Here's how:

1. Go to Sales and select Product and Services.
2. Click New, then select Inventory.
3. Enter the name of the service you provided to your clients. You can also enter the name of the product you're using. Example of Microsoft (licenses).
4. Select the category you wanted you to use to categorized the product. You can click Add new by clicking its drop-down arrow if you want to create a specific category.
5. Enter the number of items in the Initial quantity on hand*. Fill in the rest of the information.
6. Enter the cost of the item. Then, select the name of the vendor (Microsoft) in the Preferred Vendor drop-down.

Once done, you can now create an invoice. Just fill in the following information and enter the amount you charge for the services you provided to your client in the AMOUNT column. 

When you're finished with an invoice, you can send your customers a paper invoice. Just click Save and send, then select Print or Preview. 

If you want to review your invoices, you can go to the Sales menu and select the All sales tab or Invoices tab. Check the Status column to see where invoices are in the sales process.

If you use QuickBooks Payments, customers can pay their invoices directly through QuickBooks payments or ACH transfer. We process and handle everything for you. When you get paid, QuickBooks puts transactions into the correct accounts.

If you use an external platform to process payments, you can easily keep track of payments as well. Follow the steps to record invoice payments manually.

In addition, you can personalize your invoices. Simply create custom templates to do so.

Should you have any further questions or concerns about tracking your business, please let me know. I'll be happy to help.

Thanks for the reply.

In my mind Inventory items would be for tangible products. Would that be the correct way to handle software? Note that some software subscriptions aren't based on the number of user licenses either. For example I might pay a flat $50/mo for a digital storage account and then charge multiple customers to store data there based on how much space they use. So ClientA may be charged $40/mo, ClientB $25/mo, etc. And it varies from month to month.

Thanks for the reply.

In my mind Inventory items would be for tangible products. Would that be the correct way to handle software? Note that some software subscriptions aren't based on the number of user licenses either. For example I might pay a flat $50/mo for a digital storage account and then charge multiple customers to store data there based on how much space they use. So ClientA may be charged $40/mo, ClientB $25/mo, etc. And it varies from month to month.

You're certainly welcome, @CM99.

Let me loop in and share additional insights. 

I'd agree with @ReymondO in setting up your software as an inventory item. This will be based on the user license per software. While the storage can be tracked as a service item and can be set automatically using the storage account's cost. 

However, when it comes to invoicing, you'll have to alter/update the amount base on the storage used by the customer. Please refer to the following screenshots below for my sample.

This will be the best way to track the storage since this may change from time to time. For more information about tracking your products, you may refer to this helpful guide: Set up and track your inventory in QuickBooks Online.

If you have other questions or clarifications, do let me know. I'm here to help. Have a nice day.