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A
Andrew142
October 1, 2024
Question

When creating a Purchase Order for buying inventory, do I complete the Category Details or Item Details Section?

  • October 1, 2024
  • 1 reply
  • 0 views

The reason I am asking is that we have been completing the Item Details section but I cannot list them under cost of goods sold. If I use the Category Details section, I can use the COGS category. 

 

How do you decide which section to use? If I use the Item Details section, how do I code it as cost of goods sold? 

 

Thank you

1 reply

C
CamelleT
October 1, 2024

You're in the right place for clarifications about completing your Purchase Order(PO) in QuickBooks Online (QBO), Andrew. This platform is designed to streamline your process, and I'm here to provide you with all the information necessary to make it as smooth as possible.

 

First, please note that POs are only available in QBO Plus and Advanced subscriptions.  Make sure this feature is enabled before using it.


When creating them, you need to fill in the Item Details section.



Then, make sure the items are set up as inventory items in your system. This way, when these are sold and an invoice or sales receipt is created, the program will automatically deduct the inventory and record the expense in the COGS (Cost of Goods Sold) account. This automatic entry is crucial for your financial reporting, as it ensures that your income statement accurately reflects the costs associated with the goods you have sold, providing a clear picture of your business's profitability.

Additionally, I'll add this article to learn more about the impacts of inventory tracking in QBO: Impacts of inventory tracking on the Balance Sheet and Profit & Loss reports in QuickBooks Online.

 

Need some help managing your inventory? Check out QuickBooks Live Expert Assisted. Our team of knowledgeable experts specializes in helping businesses like yours streamline stock management processes. They can assist you in setting up accurate inventory records, so you always know what you have in stock. From configuring your products to generating insightful reports, they can guide you every step of the way.


If you have other questions about making purchase orders or creating reports in QBO, please feel free to add them below. I'm here to help you navigate any challenges you might face and ensure you get the most out of the software. Your inquiries are welcome, and I'm ready to assist you in finding the ultimate solutions, Andrew.

A
Andrew142Author
October 1, 2024

Hi @CamelleT 

Thank you for the response. 

I do not keep inventory and simply buy what is needed for each customer. The items I buy for customers change each month and it is rare that I have to buy the exact same thing more than once. 

 

For example: Customer needs an engine for a bulldozer. We buy it, then charge the customer for the engine and to install it. I will never have another customer that will need the exact same engine again. I was thinking that because the items I sell are unique, there is no need to create an inventory for just one item. 

 

Do I need to create an inventory for each item I buy, even if it is the only one I will ever have in my inventory? I was thinking there would be an easier way to accomplish that so that I do not end up with so many individual inventory items. 

 

I hope that makes sense. Thank you

Candice C
Candice C
October 1, 2024

Good evening, @Andrew142. 

 

I appreciate you coming back and giving more details. 

 

You could use non-inventory items instead since those are for items that don't need their quantity tracked.  

 

However, this ultimately comes to accounting preferences/personal choice and how you'd like them to show. 

 

Feel free to come back if you have any other questions. Take care! 

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