How to Track Your QuickBooks Online Inventory [Updated 2024]

Today, we are diving into the inventory module in QuickBooks Online. This guide will help you understand how to manage your inventory from start to finish, including purchasing items, tracking inventory, and selling items. Let’s get started!

Understanding QuickBooks Online Inventory

QuickBooks Online offers robust inventory management features, but it’s essential to determine if it suits your business needs. You might choose to use QuickBooks Online directly, integrate it with another app, or stick with a simple spreadsheet for minimal inventory. In this article, ensure you’re using QuickBooks Online Plus or Advanced: This version includes Inventory tracking.

Setting Up Inventory in QuickBooks Online

1. Accessing Inventory Module

Navigate to the inventory section by going to “Sales” and then “Products and Services”. This is where you will manage all your inventory items.

2. Creating Inventory Items

To create a new inventory item, click on the “Products and Services” option to add a new item. You have several options here:

• Inventory Items: Products you buy or sell that affect cost of goods sold.
• Non-Inventory Items: Items you buy but do not sell on a unit basis.
• Services: Non-physical items like design or CFO services.
• Bundles: Group multiple inventory items into a bundle.

Adding a New Inventory Item

Let’s walk through adding a new inventory item, “Tulip Bulbs,” for a landscaping company:

1. Enter Details: Provide a name, SKU, and category (e.g., Landscaping).
2. Quantity on Hand: Specify the initial quantity and the date.
3. Reorder Point: Set a threshold to alert you when inventory is low.
4. Assign Accounts: Choose the appropriate inventory asset and income accounts.
5. Descriptions: Enter descriptions for both sales and purchase sides.
6. Cost and Vendor: Enter the cost per unit and preferred vendor.
7. Save: Save the new inventory item.

Purchasing Inventory

To add purchased inventory to QuickBooks, you navigate to “+” icon in the right corner, choose “Purchase Order”:

1. Create a Purchase Order: Send a purchase order to your supplier.

1. Convert to Bill: Once you receive the items, convert the purchase order to a supplier bill. This updates your inventory quantity.

Selling Inventory

When you sell inventory items:

1. Create Invoices or Sales Receipts: Generate an invoice if payment is pending or a sales receipt if payment is received.
2. Inventory Adjustment: QuickBooks automatically adjusts the inventory quantity and updates the cost of goods sold.

Monitoring Inventory

Use various inventory reports to monitor your inventory, go to “Reports” section on sidebar:

• Sales by Product/Service Summary: Identifies your best-selling products.

• Inventory Valuation Summary: Shows the value of your inventory.

Conclusion

Managing inventory in QuickBooks Online is a comprehensive process that can greatly enhance your business’s efficiency and accuracy in tracking stock. By understanding and utilizing features such as setting up inventory items, purchasing inventory, selling products, and monitoring inventory through various reports, you can maintain a well-organized and updated inventory system.

By following this guide, you’ll be equipped to streamline your inventory management process, reducing errors and improving overall business operations. Whether you’re a small business just starting out or looking to scale up, QuickBooks Online offers the flexibility and functionality to meet your inventory needs effectively.