Tracking free shipping costs

Welcome to the Community, @Thill2322.

Let me help and provide information about tracking shipping costs in QuickBooks Desktop (QBDT).

Firstly, you have to create two service items (not discount items) - the Shipping Cost and Free shipping items which will use a Shipping Cost income account. In the invoice, add the item you're selling and the shipping cost. Then create a credit memo to apply to that invoice and reduce the total invoice amount. In the credit memo, include the Free shipping item to offset the invoice amount. This way, the shipping cost account will show 0 and won't overstate or double the amount for the profit and loss since it is being used for offsetting the transactions.

To view the report, you need to run the Transaction Detail Report. 

Here's how:

1. Go to the Reports menu.
2. Select Custom Reports, and click Transaction Detail.
3. Select Filter, and select Name in the Choose Filter.
4.  Choose the specific customer from the drop-down list. 
5. In the Type field of the Filter section, enter the transaction type. 
6. Select payments, credit memos, and invoices to filter. 
7. Click OK to generate the report.

I'll add this article to help you customize the data, add or delete columns, add or remove information on the header/footer, and even personalize the font and style of the report: Customize reports in QuickBooks Desktop.

Please feel free to drop a comment below, if you have further concerns about tracking or other QBDT-related concerns. I will answer them in any possible way.

@Thill2322 

@Clark_B 's answer is close but not the best IMO. 

You can add the Shipping Cost item to the invoice and then add the Free Shipping item on the invoice as a negative amount so the two net to zero.  Adding the free shipping item as a negative amount makes it visible to the customer on the invoice.  A credit memo is a separate document that does not show on the invoice.  

Thank you for your reply. 

Thank you for your reply. I have tried this but it does not have the outcome we want on the sales by item summary report. I appreciate your time!

Hello there, @Thill2322.

To further assist you with your concern, can you please verify which steps you followed?

Waiting for your response. Take care.

Hi there,

Yes, I had thought of your idea as well. But when I tried adding the positive shipping cost line item then adding another shipping cost line item as a negative my shipping costs qty increased, and the negative amount was not put into a separate line on the Sales by Item Summary report. This is what our end goal is. Not increase the number of shipping costs for the month but to track all free shipping costs. To me, I don't see how it can be done for this specific report because free shipping is not something we are adding to the invoice. But, my manager really likes this report and how it breaks down everything and she really wants to see the free shipping on this report just like she sees discounts that are taken. I hope this helps explain a little more in detail. Please let me know if you have any thoughts or questions. Thank you!