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windylou
March 16, 2021
Solved

How to Expense Inventory Items?

  • March 16, 2021
  • 1 reply
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I'm trying to figure out how to expense inventory items. For example, I have 5 bags of clips. We sell bags of clips to our distributors, but our technicians also use clips for our service work. When I receive them, I put them all into inventory. So when my technician needs a bag, how do I remove it from inventory to my supplies expense account? Do I create a separate item for the expense account, then create an invoice for said items, then use the expense item to offset the invoice amount or is there an easier way to do this? Or is that even the correct way?

Best answer by Charies_M

Hi, windylou.

 

I'm here to address your follow-up question about how to expense Inventory Items used for service work in QuickBooks Desktop (QBDT).

 

After creating an invoice or sales receipt, you'll need to zero out its balance. This can be done by creating an Expense item and add it to the transactions with a negative amount.

 

Here's how to create an item:

 

  1. Go to Lists,  then select Item List.
  2. On the Item List window, select Item then New, then select New Item.
  3. Select the type of item you want to create.
  4. Fill out the item fields.
  5. Use Custom Fields to add your own customized fields.
  6. Select Save.

Then apply the item to your invoice or sales receipt.

 

To create an invoice

  1. Go to the Customers menu, select Create Invoices.
  2. Fill in the necessary information. Add the Expense Item in the next line with a negative amount.
  3. Select Save & Close.

To create a sales receipt:

 

  1. Go to the Customers menu.
  2. Choose Create Sales Receipts/Enter Sales Receipts.
  3. Fill in the necessary information. Add the Expense Item in the next line with a negative amount.
  4. Click Save & Close.

If you're using QuickBooks Desktop Enterprise, you can use this method of offsetting your inventory balance. Visit this article to know more: The Inventory Offset balance is too high or too low.

 

You can run the Transaction Journal Report for the invoice/sales receipt and you'll see the Sales/Accounts Receivable transaction as well as the Inventory/COGS transactions.

 

Don't hesitate to let me know if there's anything else you need help with managing inventory. I'm here to help anytime.

1 reply

R
Rasa-LilaM
March 16, 2021

I’m here to share some information to help track your expense inventory items, windylou.


You can use QuickBooks to track the items you keep in inventory and sell to your customers. It will help monitor the current number in stock and the value of your inventory after every purchase and sale.


In your company file, make sure to set up your items properly. Doing so ensures your inventory records are in order.


Check out this guide for detailed instructions. It contains information on the Purchase and Sales Information and specific accounts to use for the items: Add, edit, and delete items.


To remove the items used for the service, create an invoice or sales receipt. This will decrease what’s on hand by the amount on the transaction.  


To learn more on how to efficiently manage your inventory, click here to view our self-help articles. For additional resources, here’s a helpful reference that will guide you when to perform the following task: Adjust your inventory quantity or value in QuickBooks Desktop.


Keep in touch if you have other QuickBooks concerns. I’ll be glad to answer them for you. Wishing your business continued success.

W
windylouAuthor
March 17, 2021

So create an invoice or a sales receipt, but what about the balance? Do I create it as a zero amount invoice or do I create an expense item to offset the amount? Won't creating an invoice increase my sales?

C
Charies_MAnswer
March 17, 2021

Hi, windylou.

 

I'm here to address your follow-up question about how to expense Inventory Items used for service work in QuickBooks Desktop (QBDT).

 

After creating an invoice or sales receipt, you'll need to zero out its balance. This can be done by creating an Expense item and add it to the transactions with a negative amount.

 

Here's how to create an item:

 

  1. Go to Lists,  then select Item List.
  2. On the Item List window, select Item then New, then select New Item.
  3. Select the type of item you want to create.
  4. Fill out the item fields.
  5. Use Custom Fields to add your own customized fields.
  6. Select Save.

Then apply the item to your invoice or sales receipt.

 

To create an invoice

  1. Go to the Customers menu, select Create Invoices.
  2. Fill in the necessary information. Add the Expense Item in the next line with a negative amount.
  3. Select Save & Close.

To create a sales receipt:

 

  1. Go to the Customers menu.
  2. Choose Create Sales Receipts/Enter Sales Receipts.
  3. Fill in the necessary information. Add the Expense Item in the next line with a negative amount.
  4. Click Save & Close.

If you're using QuickBooks Desktop Enterprise, you can use this method of offsetting your inventory balance. Visit this article to know more: The Inventory Offset balance is too high or too low.

 

You can run the Transaction Journal Report for the invoice/sales receipt and you'll see the Sales/Accounts Receivable transaction as well as the Inventory/COGS transactions.

 

Don't hesitate to let me know if there's anything else you need help with managing inventory. I'm here to help anytime.

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