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Set up inventory after you move from QuickBooks Desktop to QuickBooks Online
Learn how to set up inventory in QuickBooks Online when you didn't migrate it from QuickBooks Desktop.
You'll set it up new in QuickBooks Online and choose how to value it. Do this before you record new sales or purchases as those change your inventory numbers.
If you already migrated your inventory, these steps won't work. Migrated inventory keeps its start date and can't be changed. To check it, go to Check your data after you move from QuickBooks Desktop to QuickBooks Online.
This article is for anyone who didn't migrate inventory, including if:
You moved from QuickBooks Desktop for Mac. Mac inventory doesn't migrate; your items arrive as non-inventory items.
You used moving average cost (MAC) in QuickBooks Desktop for Windows. Only FIFO inventory migrates.
You chose not to migrate your inventory, or your Desktop inventory had problems and you want a clean start.
If your FIFO inventory did migrate, this article isn't for you. Migrated inventory keeps its start date and can't be changed. To check it, go to Check your data after you move from QuickBooks Desktop to QuickBooks Online.
Inventory tracking is available in QuickBooks Online Plus and QuickBooks Online Advanced. If a third-party app tracks your inventory with a method other than FIFO or moving average cost, check that app's instructions instead.
What you'll need
Your Inventory Valuation Summary report and Balance Sheet from QuickBooks Desktop, saved before you moved. You'll use the quantity and cost for each item.
Sign-in access to QuickBooks Online as a primary or company admin.
Set up your inventory
Step 1: Turn on inventory tracking and choose a valuation method
Select Settings, then Account and settings.
Select Sales, then Edit in the Products and services section.
Turn on every option, including Track inventory quantity on hand.
Choose your valuation method: moving average cost or FIFO.
Select Save, then Done.
Pick the method your accountant recommends. You can't change it once you've set it, and the choice affects your cost of goods sold.
Step 2: Set up each item
Repeat these steps for every inventory item. Use the quantity and cost from your Desktop Inventory Valuation Summary report.
Select Settings, then Products and services.
Find the item, then select Edit in the Action column.
If the item isn't set up as inventory, select Change type, then Inventory.
In Initial quantity on hand, enter the quantity from your Desktop report.
In As of date, enter the date the quantity is accurate. You can't record transactions for this item before that date.
In Cost, enter the item's cost from your Desktop report.
Select Save and close.
Unlike migrated inventory, you can change these starting values later if you need to.
Step 3: Make the extra sub-products inactive
Some of your items may have Inventory Asset and COGS sub-products. QuickBooks Online created them to preserve asset value and cost of goods sold. Once you've set up the item, you don't need them.
Select Settings, then Products and services.
Find the sub-product, then select the dropdown in the Action column.
Select Make inactive.
Step 4: Offset the old inventory asset account
When you set up inventory items, QuickBooks Online creates a new default account called Inventory Asset-1. Your old inventory asset account still has a balance, so you'll zero it out with a journal entry. If you're not sure about this step, ask your accountant.
Select New, then Journal entry.
On the first line, choose your old inventory asset account. Enter its balance in the Credits column.
On the second line, choose Opening Balance Equity. Enter the same amount in the Debits column.
Select Save and close.
Check your results
Run an inventory valuation summary report and a balance sheet in QuickBooks Online. Compare them to the Desktop reports you saved. Your quantities and inventory asset balance should match. To track inventory going forward, go to Set up and track your inventory in QuickBooks Online.
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