Managing Assets and Consumables in Advanced Inventory

Hi @ChristineCanada ,

Let's determine if I understand what you are wanting to do:

1.  You purchase small tools and add them to inventory using an Inventory Item when you purchase them from the vendor and enter the vendor's bill.

2.  You use one/several small tools on a particular job and you want to cost them to the job.

3.  If the tool is rendered damaged or it's useful life is over in the course of the job, then you will dispose of the tool.

4.  If the tool still has a useful life, you want to return it to inventory and make it available for use on future jobs.

If this is all correct, then I suggest you do the following:

1.  Create an Inventory Item for each small tool in question.

2.  When you purchase the tool from the supplier and enter the invoice, use the Inventory Item for that tool.  This puts the value of the tool into inventory.

3.  Since tools are being costed to the job but are never going to be "sold" to the customer on a sales document, you will need to make an Inventory Adjustment to take the tool out of inventory and cost it to the job.  You will use the Adjust quantity/Value on Hand function in the Inventory features.

4.  You have the option of making the adjustment type to be Quantity, Total Value, or Quantity and Total Value.  I suggest you use Quantity and Total Value.

5.  Enter the date, and the Adjustment Account which can be the COGS account.  You can enter it into a top level COGS account, or if you have sub-accounts under your COGS account to further break out your COGS expenditures, enter it to one of them.  It might even be helpful to create a sub-account under COGS just for this purpose . . . for small tools to move in and out of.

6. Give the entry a Reference No., enter the Customer:Job, and the Class if you are using Class Tracking for these transactions.

7.  Enter the item name you created for this tool.  It will auto-populate the QTY on Hand field.  Enter in the New Quantity.  If one of these is going out to a job, and you had a current QTY of 5, you would enter a New Quantity of 4.  The QTY Difference will auto-calculate.  Or, you can enter the QTY Difference as -1, and the New Quantity will auto-calculate.  The Value of the Adjustment (dependent on which method of inventory valuation you have chosen to use, Average Cost or FIFO) calculates at the bottom of the window.  This is the amount that will go to COGS and be assigned as a cost to this job.

8.  If and when the tool is "returned" to inventory, you would follow the same process as above but in reverse, adding the item back into inventory.  If you want to leave the cost of this tool in the cost of the job, when you return the item to inventory, do not enter a Customer:Job in the adjustment entry.  This way the quantity and value will be returned to inventory, netting in a $0.00 balance for this tool in the COGS account, but the value will still be assigned to the cost of the original job.

This should accomplish the original intentions you stated in your post.  If I have incorrectly stated these intentions, please let me know and we can re-look at the process above to see what will work best for you.

Hi ChristineCanada,

Welcome to the QuickBooks Community. You'll find it's a great way to connect with other users and get answers to your questions. QuickBooks Enterprise has a hearty inventory module that can help you keep on top of it. Rochelley has done a fantastic job of explaining the process. I want to provide you with the article to review if you want: Adjust your inventory quantity or value in QuickBooks Desktop. 

You can always reach back out if you require further assistance. Have an amazing day!