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SandyD_4
June 10, 2021
Question

I have two questions: How do you markup inventory in online? Does QBO automatically adjust cost based on new purchase?

  • June 10, 2021
  • 2 replies
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2 replies

SophiaW
SophiaW
June 10, 2021

Hi SandyD_4

Thanks for reaching out to us.

Your cost is based on the rate when you buy the item. You won't need to update the product cost on your item list every time you make a purchase. You won't need to create another item just because of the cost changes. QuickBooks will automatically report the realized cost based on the FIFO concept.
 
You're able to markup your inventory in QuickBooks Online.

Here's how to edit your products and services:
  1. Click the Gear icon.
  2. Select Products and Services.
  3. Locate the inventory component and click Edit.
  4. Fill out the Sales price/rate and Cost fields.
  5. Click Save and close                                    Hope this is of help. Have an amazing rest of the evening!
S
SandyD_4Author
June 10, 2021

This is really not what I am looking for.  

 

When entering a product or service in payables will it automatically change the cost in inventory based on the new cost?  So for an example:  in inventory the cost of a hat said $5.  We just purchase some more hats and now the cost is $6.  Will the system update the cost to $6 in  inventory. .

 

Which leads to my second question:  our markup is eg 10% .the hats were $5 +.50 sales cost $5.50.  Now that the costs has gone up the sales costs should be $6.00 + .60 = $6.60.Can all of this be done automatedly and not manually.

 

I notices the price rules but the increase/decrease is added the the sales price and not the Cost of the item. If the same thing could be done to the cost it would work

T
Tammy_H
June 10, 2021

Hi Sandy,

 

I'm glad you reached out for clarification. If you purchase 10 hats. The first 4 costs you $2/each, the next 3 cost you $4/each and the last 3 costs you $5/each. With the FIFO cost method, when you sell these items, it will calculate the cost based on what you've paid. So if someone comes in and buys 6 hats, it will calculate the cost at 4x$2=$8, + 2x$5= $10= cost of $18. What they are sold for is what you put in as the sales price. This has to be changed manually. It won't change because the cost did.

 

I hope this helps.

 

    T
    Tammy_H
    June 10, 2021

    Hi SandyD_4,

     

    It's fantastic to see that you're expanding your use and knowledge of your QuickBooks Online program. With its thorough inventory module, you can stay on top of your bottom line. Sophia has given you some good information, but I want to fill in some of the details for you.

     

    If you're not familiar with the term, FIFO refers to the First In First out cost method. This means the first inventory items purchased will be the first to be sold. Here's an article that explains this in further detail: What is FIFO and how is it used for inventory cost accounting? The program won't create a mark-up on your inventory items, the only products that can be set with a markup value are the ones set up as billable expenses.

     

    You can change the sale price on any item as you see fit. If your costs increase you can edit the sales price of the inventory item. This article goes through adding new products and how to edit them later: Add product and service items to QuickBooks Online.

     

    If you require any further assistance, reach out. Have a great night!

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