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sjangity
Level 2

Workflow from inventory received to credit-card and vendor payments

Background:

  • First time setting up an online retail business.
  • First time doing everything under the sun for building and growing my business.
  • First time QB Desktop Premier user.
  • Zero accounting background.

 

What works:

  • I got my inventory into QB (excel import) and manually added the QTY on hand.
  • I got my products built along with the costs of their materials.
  • I got my pricing set-up
  • I understand the Discount item and Price level parts

 

I plan to run an online retail business and my material purchase patterns will mirror exactly the above. The question is...

 

How do I track the payments I ALREADY made (via credit card) for the inventory parts I used to build my products across various vendors? I buy parts from online storefronts and the payment is made immediately; I wait a few days for the inventory to arrive. I am familiar with the PO/Bill concept and transaction concept, but I just don't understand the whole reconciliation process with credit card payments already made. Again, I purchased inventory parts already and built my products.

 

The workflows that I am confused about are:

  • Just purchased inventory and paid for it; how do I sync that with QB
  • Just received inventory from vendor; how do I sync that with QB

 

I am getting ready to start my online business and sell. Before I start taking orders of my products via my e-commerce channels, I want to make sure I get my QB setup right. THANK YOU.

 

 

Solved
Best answer May 22, 2020

Best Answers
KlentB
QuickBooks Team

Workflow from inventory received to credit-card and vendor payments

Thanks for choosing QuickBooks as one of your partners in building your business, sjangity.

 

I'm here to clear things out for you.

 

When we record items in the program, we'll have to use PO and bill then Receive Inventory instead of directly entering the quantity on hand of the item. This way, we'll be able to correctly tie the inventory to your payments.

 

To make sure that everything is accurate, we'll have to delete the inventory item then recreate it with zero on hand. We can create an inventory adjustment to zero out its quantity on hand. First, let's create a separate account in your chart of accounts to track your adjustments:

 

  1. Select Company from the top menu bar, then select Chart of Accounts.
  2. Click the Account drop-down, then select New.
  3. From the Other Account Types drop-down, click Cost of Goods Sold.
  4. Name this account “Inventory Adjustments”, and then Save and Close.

Then, we can now create an inventory adjustment:
 

  1. Select List from the top menu bar, then choose Item List.
  2. Go to Activities, then select Adjust Quantity/Value on Hand.
  3. Click Find & Select Items and check the box for the inventory item you wanted to adjust.
  4. Click Add Selected Items, then enter the account you've created for the adjustment in the Adjustment Account drop-down.
  5. Enter zero in the New Quantity column and click Save & Close.

Once done, let's make this item as inactive to remove it in your Item List. Simply go to List and select Item List. Then, right-click the item and select Make Item Inactive.

 

After that, we can now enter the credit card payments and inventory parts you've used to build your products from your vendors:

  1. Select Vendors from the top menu bar, then go to the Vendor Center.
  2. Choose then right-click the appropriate vendor.
  3. Select Enter Credit Card Charges.
  4. Go to the Items tab, then select Add New from the Item column.
  5. Enter the necessary information, make sure to leave the quantity on hand as zero.
  6. Click Save & Close when you're done.
  7. Enter the cost, amount, and description of the item, then click Save & Close.

For the inventory that you've just purchased and received, we can use the Accounts Payable workflow in recording it. I'll guide you how:

  1. Create a purchase order
  2. Receive your inventory
  3. Enter your bills against the inventory
  4. Pay your bills

Wonder how to check if the status of your inventory is accurate and up-to-date? We can pull your Inventory Stock Status by Item report. Here's how to do it:

 

  1. Select Reports from the top menu bar.
  2. Choose Inventory.
  3. Select Inventory Stock Status by Item.
  4. Look for the items you've added/adjusted and make sure everything is correct.

To know more about how credit card payments reconciliation works in QuickBooks, you can read our guide to help keep your accounts accurate.

 

I'm always here and ready to work with you again if you have other questions about handing inventory transactions. Have a great rest of the day.

View solution in original post

9 Comments
KlentB
QuickBooks Team

Workflow from inventory received to credit-card and vendor payments

Thanks for choosing QuickBooks as one of your partners in building your business, sjangity.

 

I'm here to clear things out for you.

 

When we record items in the program, we'll have to use PO and bill then Receive Inventory instead of directly entering the quantity on hand of the item. This way, we'll be able to correctly tie the inventory to your payments.

 

To make sure that everything is accurate, we'll have to delete the inventory item then recreate it with zero on hand. We can create an inventory adjustment to zero out its quantity on hand. First, let's create a separate account in your chart of accounts to track your adjustments:

 

  1. Select Company from the top menu bar, then select Chart of Accounts.
  2. Click the Account drop-down, then select New.
  3. From the Other Account Types drop-down, click Cost of Goods Sold.
  4. Name this account “Inventory Adjustments”, and then Save and Close.

Then, we can now create an inventory adjustment:
 

  1. Select List from the top menu bar, then choose Item List.
  2. Go to Activities, then select Adjust Quantity/Value on Hand.
  3. Click Find & Select Items and check the box for the inventory item you wanted to adjust.
  4. Click Add Selected Items, then enter the account you've created for the adjustment in the Adjustment Account drop-down.
  5. Enter zero in the New Quantity column and click Save & Close.

Once done, let's make this item as inactive to remove it in your Item List. Simply go to List and select Item List. Then, right-click the item and select Make Item Inactive.

 

After that, we can now enter the credit card payments and inventory parts you've used to build your products from your vendors:

  1. Select Vendors from the top menu bar, then go to the Vendor Center.
  2. Choose then right-click the appropriate vendor.
  3. Select Enter Credit Card Charges.
  4. Go to the Items tab, then select Add New from the Item column.
  5. Enter the necessary information, make sure to leave the quantity on hand as zero.
  6. Click Save & Close when you're done.
  7. Enter the cost, amount, and description of the item, then click Save & Close.

For the inventory that you've just purchased and received, we can use the Accounts Payable workflow in recording it. I'll guide you how:

  1. Create a purchase order
  2. Receive your inventory
  3. Enter your bills against the inventory
  4. Pay your bills

Wonder how to check if the status of your inventory is accurate and up-to-date? We can pull your Inventory Stock Status by Item report. Here's how to do it:

 

  1. Select Reports from the top menu bar.
  2. Choose Inventory.
  3. Select Inventory Stock Status by Item.
  4. Look for the items you've added/adjusted and make sure everything is correct.

To know more about how credit card payments reconciliation works in QuickBooks, you can read our guide to help keep your accounts accurate.

 

I'm always here and ready to work with you again if you have other questions about handing inventory transactions. Have a great rest of the day.

View solution in original post

sjangity
Level 2

Workflow from inventory received to credit-card and vendor payments

How can I reset my entire Item List? I've exported my list (for backup) and would like to re-import? Also, when I tried to delete a product item, it complains that the Qty on Hand > 0. I must have "built" some products. I really just want to start over on the Item List instead of hiding and re-creating the list, if that makes sense?

sjangity
Level 2

Workflow from inventory received to credit-card and vendor payments

Also, I had manually created Sales Receipts for a few products I sold. I had to remove the sales transactions, then dismantle the products involved with the Sales. I am now able to Adjust QOH for my Inventory Parts and set them to 0. However, I am not sure I understand why we need to re-create every single item? My QOH shows 0 already. And as mentioned, if we need to re-create, can I use the Excel import after a full reset on the Item List?

AlexV
QuickBooks Team

Workflow from inventory received to credit-card and vendor payments

Good day, sjangity.

 

You're unable to delete or make the inventory inactive if there's still a remaining quantity on hand. You can delete the inventory adjustments to zero out the quantity on hand. Then, we can now delete it.

  1. Go to the Lists menu and select Item List.
  2. Select the item, right-click, and select the QuickReport.
  3. Double-click on the inventory transactions. 
  4. Click the Edit menu and select Delete Inventory Adjust.

I have some articles here for more details about items:

Please leave a comment again if you have other concerns. Have a great day!

sjangity
Level 2

Workflow from inventory received to credit-card and vendor payments

Hi KlentB and QB,

 

Thank you for your help so far!

 

I went through the exact sequence below for a single Vendor Purchase of Item X valued at 16.90, but still stuck:

  1. As you requested, cleared QOH with adjustments for a single item (Item X) and made item Inactive
  2. Took my credit card charge of 16.90 for Item X and re-added Item X using 'Add Vendor Credit Card Charges'. This changed QOH to 1.
  3. Went through the AP workflow
    1. Added PO for Item X
    2. Received inventory without Bill - QOH of Item X changed to 2??
    3. Enter bills against Inventory - This converted my Item Receipt into a Bill
    4. Clicked Pay Bill. Had to add a bank account?

 

Two questions:

  1. Why is my QOH 2? It should be 1?
  2. Why did I pay twice? I started the entire workflow with reporting a Credit Card charge of 16.90 then again I had to Pay again in the AP workflow on Step 4 using my bank account. On Pay Bill screen, if I select Credit Card it shows ending balance of 33.90 (16.90x2).

 

Thank you for your assistance.

 

Screen Shot 2020-05-23 at 6.52.03 AM.png Screen Shot 2020-05-23 at 6.59.46 AM.png

JonpriL
Moderator

Workflow from inventory received to credit-card and vendor payments

Hello @sjangity,

 

Ideally, you'll only need to create a single payment so it won't create a duplicate transaction. This is the reason why your QOH is 2 since credit card charge and bill payment is a vendor posting transaction. You either create a bill payment with a credit card as your payment method or simply a credit card charge.

 

In addition, here's an article you can read to learn more about how your vendor transaction works: Accounts Payable workflows in QuickBooks Desktop.

 

Lastly, I've got you these helpful articles about how you can manage all your vendors and related transactions: Income and Expenses for QuickBooks Desktop.

 

Keep me posted in the comments if you have any other questions. I'll be here to lend a helping hand.

bhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
Level 1

Workflow from inventory received to credit-card and vendor payments

;-;

DMalt
Level 1

Workflow from inventory received to credit-card and vendor payments

Is it possible to do this with Quickbooks Online?  The instructions don’t match what I am seeing inside of QBO.

MariaSoledadG
QuickBooks Team

Workflow from inventory received to credit-card and vendor payments

Inventory features in QuickBooks Online are available in the Plus and Advanced version, DMalt.

 

QuickBooks Online (QBO) tracks what's on hand, get alerts when it's time to restock and see insights on what you buy and sell. To do this, you'll have to turn on inventory tracking and add your inventory products 

 

Then, you can keep track of what you sell and restock your inventory. You can also use reports so you can easily check the status of your inventory. For more information and detailed steps of the setup, please read this article: Set Up And Track Your Inventory In QuickBooks Online

 

Although there might be some features that are only available in QuickBooks Desktop, you'll want to use a third-party app that allows retailers, e-commerce, and wholesale small business owners to manage their inventory and sales channels easily. This includes the workflow from inventory received to credit-card and vendor payments.

 

For future reference, you'll want to run reports to see your sales and inventory status. Please check this out: Use Reports To see Your Sales And Inventory Status.

 

Fill me in if you have further questions. I'll always be right here to help you.

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