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March 29, 2021
Question

Should job material and payments be under the same account?

  • March 29, 2021
  • 3 replies
  • 26 views

When I add a new non-inventory item to Products and Services I select Job Materials Purchased - Cost of Goods Sold for the income account. And when I write a check to the supplier I select the same Job Materials Purchased - Cost of Goods Sold as the category for what I'm paying. Is this the correct way of doing it? I notice when I run a report it will show the items from customer invoices as negative and then payments to suppliers as positive.

3 replies

QuickBooks Team
March 29, 2021

Hello there, @Arianna09. 

 

Thank you for dropping by here in Community. Let me give you some insights about inventory. 

 

The usual setup is Sales info should use an income account while Purchasing information should use an expense account. If you use the same account for sales and purchasing information, this will only offset the amounts in your report. Thus, isn't advisable to use it. 

 

You can check out this article on how to add inventory products in QuickBooks Online. I recommend referring to an accountant for additional details or opinions. 

 

Please don't hesitate to hit the Reply button. I'm always here to help. Have a great day! 

Arianna09Author
March 30, 2021

That makes sense. I wonder why "Job Materials Purchased - Cost of Goods Sold" is an option under income account when adding a new item to products and services. 

 

If I'm understanding correctly, I should change my material (pipe, faucets, tubs, etc.) to Sales of Product Income or Job Income? And when I write checks to suppliers I can continue to select Job Materials Purchased - Cost of Goods Sold as what I'm paying for? 

Jen_D
Level 8
March 30, 2021

You're absolutely correct, @Arianna09,

 

Any sale of the item must be coded as income in your books, and expenses for purchases of additional supply. I'm enclosing a few related articles about adding items in QBO:

 

 

If you have other question or concerns about item setup or anything QuickBooks related, let me know in the comment below. I'll be right here to help you anytime. Have a good one!