Question

What category do I use for Inventory purchases? I am using Quickbooks self-employed.

Forum|Forum|5 years ago
March 21, 2021
16 replies
120 views

No text available

QuickBooks Self-Employed

Level 9

Welcome to the Community, @nbpassiondiva. Thanks for visiting us today.

For your inventory purchases, you'll want to categorize these items as Supplies. You use this category for the items you buy and sell or to make the goods you sell.

See this article for more insights: Schedule C and expense categories in QuickBooks Self-Employed. It helps you learn about categorizing your transactions to make sure they match to a line on your Schedule C.

For future reference, you can also create and manage category rules to automatically categorize common income and expenses as business transactions.

I'm always around here to help if you need more assistance. Feel free to post some more.

N

nilpo

The Materials and Supplies category description specifically states to NOT use it for inventory purchases.

Fiat Lux - ASIA

Level 14

Consider switching to QBO Plus or Advanced to manage inventories.

https:// quickbooks.grsm.io/US

https:// quickbooks.grsm.io/us-promo

Otherwise, consider having an inventory management app as a workaround.

katherinejoyceO

Level 9

Hi nbpassiondiva,

Hope you’re doing great. I wanted to see how everything is going about the inventory purchases you had yesterday. Was it resolved?

Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at any time.

Looking forward to your reply. Have a pleasant day ahead!

N

nilpo

Businesses with inventories would need to upgrade to a different QB.

Inventory purchases would typically be an asset when purchased and a COGS (Cost Of Goods Sold) once an item is sold.

That said, if you are doing less than $1 million in revenue, you are not required to track inventory for tax purposes (consult your tax professional). In this case, items purchased for inventory are simply a cost of doing business. In other words, you probably want to use "Other business expense" until you reach a size where inventory must be tracked. The same would be true for items purchased on behalf of your clients. You really only need to track the inventory purchases for Sales/Use tax purposes. Otherwise, it's just another receipt.

S

shelley1971

This is a great topic as we need to create a category for products we produce and sell. Also, how would we allocate this for a single time activity? Proprietary?

R

rteest

This is still an important topic that Intuit is continuing to ignore. As an artist, if one creates fine art prints from their paintings they must get them professionally printed. If the cost of said print is $10 and they sell for $40 it is imperative that there be a category to capture this information. QuickBooks currently forces the user to identify these as Other Business Expense. Doing this puts them into a category where EVERYTHING else is a true expense that produces no profit. However, these ARE profit producers so the total over a year MUST be broken out. Otherwise, as I am doing now, I must MANUALLY calculate the total spent to purchase said prints and then report to my CPA my Cost of Goods. Why on earth would Intuit not provide this simple category?

J

JonpriL

Level 9

I hear you, @rteest. I share details about the category in QuickBooks Self-Employed.

As of the moment, there isn't an integrated way to separately track the category of your expenses. With this, let's consider letting our product developers know about your request by sending feedback.

To do so:

Go to Assistant.
Select the I need help button.
Enter Send Feedback in the Text field.
Choose Add a feature.
Type in the option to include a breakdown of the category under certain expenses.
Click Send.

You may also read this article for other ways to track your expenses: : Schedule C and Expense Categories in QuickBooks Self-Employed.

If there's anything else that I can help you with aside from this one, please let me know by leaving a comment using the Reply option below. Take care always!

A

Alisonkolberg

My revenue is most definitely no where near 1 million a year. So does that mean items I’m purchasing at wholesale to sell to clients gets categorized under ‘other business expense’ or ‘materials and supplies’?

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