Skip to main content
P
petergcole
October 30, 2021
Question

How do enter my cost for non-inventory products that I sell at a markup?

  • October 30, 2021
  • 2 replies
  • 0 views

Hello,

 

As part of my business I purchase products for my customers via a distributor and sell them to customers, sometimes at a markup. I do not hold inventory as I only order the products once the customer has paid for them. My question is, where in QBO do I enter my cost for these products so it can calculate the profit on the sales? I tried to create a COGS account but the only detail types available under that account type are Cost of Labor, Equipment Rental, Other costs and services, Shipping, freight and delivery, and Supplies and Materials. I thought it might be the last one, but the description for that is "Use Supplies & materials - COGS to track the cost of raw goods and parts used or consumed when producing a product or providing a service", which doesn't really sound like my situation.

 

Thanks in advance for any advice.

2 replies

C
Catherine_B
October 30, 2021

Hello there, petergcole.

 

You can edit the markup and enter the cost, sales price, and markup percent if you have QuickBooks Desktop Enterprise. Just click the Edit Markup option when you edit or create a new item. Let me show you how:

 

  1. Click the Lists menu and select Item List.
  2. To edit, double-click a non-inventory item. 
  3. Select Edit Markup.
  4. Enter the markup details and then click OK.
  5. Click OK to close the window.

The Price Level function in QuickBooks Desktop allows you to set prices for all your inventory and expense items. You can also check this article to learn how to compute the average cost and know which report will help with inventory management: Understand Inventory Assets and COGS tracking.

 

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

P
petergcoleAuthor
October 30, 2021

So you're saying I can't do this in QBO? Is there a workaround for QBO or do I need to switch to Quickbooks Desktop? Also you specified QB Desktop Enterprise, does that mean this feature is not available in the regular Desktop version? I am a one-person company so the idea of needing an "Enterprise" version of the software is little odd to me.

 

katherinejoyceO
katherinejoyceO
October 30, 2021

Thanks for the follow-up questions, @petergcole. 

 

To clarify, the steps shared by my peer above are for QuickBooks Desktop. Let me share with you a few insights about the Markup feature in QuickBooks Online. 

 

This feature is only available in Plus and Advanced versions of QBO. Here are the steps to enable the Markup feature: 

 

  1. Go to the Settings menu (Gear), then choose Account and Settings.
  2. Select the Expenses tab. 
  3. Hit on the pencil icon for Bills and expenses.
  4. Leave the default markup rate box as blank so you can change the markup percentage, then update other information if needed.
  5. Click Save, then Done.

 

Once done, you can record the billable expenses to invoice. You can refer to this article for more information: Enter billable expenses.

 

We're always around to help you more and make things clear for you if you have other questions. 

 

E
Ernest9
August 16, 2023

It would be difficult to later check your margins on individual items this way, but when you pay for the item you have already sold, you could enter the purchase simply as COGS.

 

Otherwise you could:

1: Enter the item into inventory with the bill function before you actually pay for it.

2: Sell the inventory item to your customer as you normally would on QuickBooks Online

3: Use the "pay bills" function when you *actually* pay for the cost of the goods sold. 

Terms & ConditionsAccessibility statement