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Peak Environmental
Level 1

Tracking raw material used in service

I work for a small landscaping company and currently using QuickBooks Desktop - Premier Plus Contractor Edition.  We have bulk raw materials delivered to the shop (mulch, stone, sand, etc) which is then applied to jobs at a later date.  In the winter we have rock salt that gets applied to sites as needed.  For job costing, I have to apply the material, such as:  4 yards of mulch to grounds maintenance job A, or 3 tons of cobble to construction job B, or 40 tons of salt over 20 job sites per storm. 


My question is do I set up raw materials as Inventory items or Non-Inventory items?   For all of these jobs we do not sell the item individually, but as a component part of the overall contract.  Which sounds like Non-Inventory part but I'd like to track the quantity so that is only available with Inventory part.  Currently I put all the deliveries into a Shop Inventory account and create a monthly journal entry to COGS job materials (per division) with the customer/job. This is time consuming and requires a lot of rework to find the current quantity balance and cost of each aggregate.  Hoping there is a better/faster way but that records the costs appropriately as well.  


4 Comments 4
QuickBooks Team

Tracking raw material used in service

Thanks for sharing the details with me, @Peak Environmental.


Allow me to provide some information on how to achieve this. You’ll want to set up your raw materials as Inventory parts.


That way, the Cost of Goods Sold will be calculated when the item is assigned to a job. That being said, here’s how to set up an inventory item in your QuickBooks Desktop (QBDT) software:


  1. Go to the Lists menu.
  2. Select Item List 
  3. Click the Item drop-down and select New.
  4. Select the type of item.
  5. Fill out the item fields.
  6. Then click Save when done.

You can also utilize this article for more details (select the Create an item section): Add, edit, and delete items.


I’d also recommend checking with your account for guidance if you’re unsure of what income account to choose in setting up your inventory item. This way, we’ll ensure the accuracy of your accounts.


Additionally, I'm adding these resource that you can use as reference in case you have other inventories stored at different sites or locations and want to track them: Set up Advanced Inventory.


Let me know if there’s anything else I can help you with about managing your inventory items. I'll be around ready to assist you. Have a great day ahead!

Fiat Lux - ASIA
Level 15

Tracking raw material used in service

@Peak Environmental 

Consider having a construction management app to manage your inventories. 

Level 1

Tracking raw material used in service

After setting up inventory items should bulk quantities purchased get charged to an “other current assets” account?

QuickBooks Team

Tracking raw material used in service

Allow me to chime in and provide some info about inventory purchases, @DanOlsen


In QuickBooks Desktop, when you buy an inventory item, your bill, check, or credit card charge will debit the item's inventory asset account and credit your A/P, bank, or credit card account. 


With regards to the account that will be charged, it depends on the asset account that you set up for the inventory items. 


The best way to track your inventory purchases is to generate the Inventory Valuation Summary/Detail reports for all dates. For detailed steps, you may utilize this resource: Understand statements in QBDT.


You'll want to track inventory stored at different sites or locations. You can use the Advanced Inventory feature to ensure your quantity on hand by site is accurate.


Fill me in if you have other questions about inventory tracking in QuickBooks. I'm always around to help you. Stay safe and have a good day! 

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