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Yogi
February 17, 2024
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Unique inventory items

  • February 17, 2024
  • 1 reply
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I have a client who intends to buy machinery at auction and then resell it once it is in working order. What is the best way to keep track of the costs for each potentially unique piece of equipment until it is sold? 

Best answer by Rainflurry

@Yogi 

 

The video below by @hectorgarciacpa shows how to record the purchase of a piece of equipment (in this case a Chevy Tahoe) and then add the cost of repairs, etc. using a WIP asset account.  He then goes on to show you how to convert those costs into an inventory item and then how to sell it.  

 

 

1 reply

C
ChristieAnn 11
February 17, 2024

Hello there, Yogi.

 

I've got steps to ensure you can efficiently keep track of the costs for each potentially unique piece of equipment in QuickBooks Online.

 

To start with, you'll have to create individual inventory items for each piece of machinery. This is done to keep track of all machine components. To complete the process, you need first enable the Inventory tracking feature on your end.

 

Then, here's how to add each part of the machinery:

 

  1. Click the Gear icon ⚙ and then Products & services.
  2. Select the New button and select Inventory.
  3. Fill out the required details like Name, SKU, and Category.
  4. Choose the specific Income account and enter the sales price/rate.
  5. Enter the purchasing information and cost of the item. Then, the particular Expense account.
  6. Fill in the other needed information.
  7. Click Save and close.

 

Once done, you can enter a bill transaction to record the auction purchase. You will then utilize the corresponding item created above and enter the exact cost as the expense amount. You can follow the steps below.

 

  1. Choose + New and Bill.
  2. From the Vendor dropdown list, select a vendor.
  3. From the Terms dropdown arrow, select the bill's terms. This is when your vendor expects to be paid.
  4. Enter the Bill date, Due date, and Bill no. as they're recorded on the bill.
  5. Enter the bill details in the Category details section. From the Category dropdown, select the expense account you use to track expense transactions. Then enter a description.
  6.  Choose the specific item in the Item details section to itemize the bill.
  7. Enter the Amount and tax.
  8. Fill in the other needed fields.
  9. Click Save and close.

 

In addition, you may create expense entries to track the costs of repair and refurbishment. 

 

Furthermore, I also recommend consulting an accountant for additional guidance and they can provide you with more suggestions on how to properly handle the transactions.

 

In case you need different guidelines for effectively managing your business using QBO, you can read this article: Help guide for QuickBooks Online.

 

Feel free to add a comment below anytime whenever you have further concerns about managing your transactions or any QuickBooks-related concerns. I'm always here to help further, Yogi. Have a good day.

Y
YogiAuthor
February 18, 2024

First, because this was purchased at auction, there will be no vendor bills to create. There will be an immediate electronic payment for the purchases, and that transaction will feed into the ledger via the bank feed. The accounting codes can be entered there when bank items are reviewed and accepted, and the inventory details will be keyed in.

Once the purchase and cost are recorded, I expect to see a future transaction from the shipping company who retrieved the purchase from the auction house and delivered it to my client. Shipping cost is part of the inventory item cost, so can that be added later in the item list so that it is associated with that specific item? 

Is there a limit to how many items can be tracked in inventory in QBO? Once the unique item is sold, can the item be inactivated within the list without affecting reports? 

 

MsNorthPND18
MsNorthPND18
February 18, 2024

Allow me to fill you in everything you need to know about how many items can be tracked in inventory in QuickBooks Online (QBO), @Yogi.

 

It's recommended to include the shipping cost in the bill accompanying the inventory item, instead of creating a separate service item. Furthermore, I suggest reaching out to your accountant to get further assistance and advice on how you can track your shipping fee cost in your QBO.

 

If you don't have an accountant, I can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

 

Regarding the items tracked in QBO, the number of inventory items you can create is limitless. It is possible to render an item inactive. However, if it was included in a prior transaction, it will still appear on the reports. It won't have an impact on the following reports.

 

For future reference, read through this article: Mapping your products in an automated tax system.

 

You can always add a comment below if you have any other questions tracked in inventory. I'm always here to help. Have a great day.

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