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Teesa66
May 4, 2020 9:54 PM UTC
Solved

Inventory - COGS vs Retail Sales

We have Inventory items that are both used as part of a service we provide and also sold as outright retail sales...Do I have to add each inventory item twice in order to track the retail sales separately?

Candice C
Candice CAnswer
May 5, 2020 2:24 PM UTC

Hey there, @Teesa66. 

 

Yes, that's correct. The double-entry of the parts can make your inventory come out incorrectly in the end. If you've used Excel in the past for your inventory, then I would recommend using it. I know how helpful this would've been for your business. I'll send feedback to our Product Developers so they can consider this as an option in one of the upcoming releases. They take the time to look over every customer's request to create an easy-to-use financial tool. 

 

Here's an article that may come in handy in the future: 

 

 

If you have any other questions or concerns, just let me know. I'm always here to lend a helping hand. Take care!

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5 replies

katherinejoyceO
katherinejoyceO
May 4, 2020 11:40 PM UTC

Hello there,@cindyz99. 

 

Thanks for visiting the Community. You don't have to add each item twice since these are part of your inventory. 

 

Let's use the Inventory to track the quantities of the product you sell, its retail sales price, and the COGS to track the cost of the products you sell. 

. 

Here's how: 

 

  1. Go to the Settings menu, then select Products and Services.
  2. Click New, then select Inventory.
  3. Add a name, SKU, or category for what you're tracking.
  4. In the Inventory Asset account drop-down, select Inventory Asset in the list. 
  5. Set your sales price rate in the field, then select the account you use to track what you sell. 
  6. Select the Sales tax category drop-down and specify how the item should be taxed. 
  7. From the Expense account drop-down, select Cost of Goods Sold. 
  8. Select a preferred vendor, then click Save and close.

 

For future reference, check out this article: Set up and track your inventory in QuickBooks Online. It also helps you learn more about adding products that you'll need to track as part of your inventory and the ones that don't. 

 

Please let me know if you have other concerns. I'm always around to help.

Teesa66Author
May 5, 2020 1:26 PM UTC

Thank you for responding and for the article links! I was not clear in my initial query... for annual audit purposes, we have to be able to identify what parts were used as part of performing the services we sell and what parts were retail sales.  Also, we list and bill all parts used during the service as separate line items when invoicing customers. Just to really confuse things, there are times when an invoice can bill the same part both ways.

 

I'm thinking that tracking the retail sales in QBO may be an inventory management nightmare and it might be best to continue to do so in Excel...

Rustler
Rustler
May 5, 2020 12:49 PM UTC

@Teesa66 

the short answer is no, you stock one item and sell it for a price (retail) or a zero price when included in a service.

Teesa66Author
May 5, 2020 1:32 PM UTC

Thank you for responding! Just to clarify... We list and bill all parts used during the service as separate line items when invoicing customers and occasionally, an invoice will bill the same part both ways (like when the customer wants a spare for future use). For annual audit purposes, we have to be able to separate out retail parts sales, thus my question. 

 

I can't come up with any other way to track the retail sales for the audit, but I'm thinking that double entry of the parts will be an inventory management nightmare in QBO and it might just be best to continue to track this in Excel...

Candice C
Candice CAnswer
May 5, 2020 2:24 PM UTC

Hey there, @Teesa66. 

 

Yes, that's correct. The double-entry of the parts can make your inventory come out incorrectly in the end. If you've used Excel in the past for your inventory, then I would recommend using it. I know how helpful this would've been for your business. I'll send feedback to our Product Developers so they can consider this as an option in one of the upcoming releases. They take the time to look over every customer's request to create an easy-to-use financial tool. 

 

Here's an article that may come in handy in the future: 

 

 

If you have any other questions or concerns, just let me know. I'm always here to lend a helping hand. Take care!

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