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Blanche M
February 28, 2023
Question

setting up inventory

  • February 28, 2023
  • 1 reply
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We make wood crafts to sell at Craft shows. I have put the wood we purchased to make the crafts into inventory. Now I am trying to set up the items made such as jewelry boxes in inventory and relieving the wood from the inventory as the cost of the jewelry. We have sold items and I need to post the sale.

I am on quickbooks small business cloud accounting Essentials.

Thanks,

Blanche

1 reply

G
GlinetteC
February 28, 2023

Hi there, Blanche. Let me share insight regarding setting up inventory in QuickBooks Online.

 

Only the Plus and Advanced editions of QBO have access to the program's built-in inventory feature. If you want QuickBooks to start automatically tracking and setting up your inventory, you may consider upgrading your subscription. Here's how:

 

  1. Sign in to QuickBooks Online as a primary or company admin.
  2. Select Settings and then Account and settings.
  3. Choose the Billing & subscription tab.
  4. Make sure your payment info is up to date.
  5. In the QuickBooks Online section, select Upgrade your plan.
  6. Review the available plans and then select Choose plan.
  7. Follow the on-screen steps to upgrade your plan.

 

On your QuickBooks Essentials, you can, however, manually track the value of your inventory. Let me walk you through the process.

 

To start, create an account to track your inventory value. Here's how:

 

  1. Go to the Gear icon and select Chart of Accounts.
  2. Click New.
  3. From the Account type dropdown, choose Current assets.
  4. Then, Other current assets from the Detail Type.
  5. Click on Save and close.

 

Next, create an account to track your cost of goods sold. The steps are outlined below:

 

  1. Go to the Gear icon and select Chart of Accounts.
  2. Click +New.
  3. Select Cost of Goods Sold from the Account Type dropdown.
  4. Pick the closest type of Cost of Goods Sold that matches your situation from the Detail Type dropdown. If you're not sure, use Other Costs of Service - COS.
  5. Select Save and Close.

 

When purchasing inventory, enter the asset account you created to track its value in the Account field. Create a Journal Entry when you sell inventory to decrease its value and increase your Cost of sales. Please follow the steps below:

 

  1. Click + New and select Journal entry.
  2. On one line, enter a Debit to your cost of goods sold account for the original cost of the product you sold. Do not use the sales price.
  3. On the next line, enter a Credit for the inventory asset account for the original cost of the product you sold.
  4. Select Save.

 

I'm adding these articles to learn more about inventory in QBO:

 

 

Please keep on posting if you need more guidance with inventory tracking. I'll still be available to assist.

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