How to Add Inventory in QuickBooks

Adding inventory in QuickBooks is essential for businesses that need to track their stock levels, sales, and cost of goods sold (COGS). QuickBooks provides a user-friendly interface that allows you to manage your inventory efficiently. This article will guide you through adding inventory in QuickBooks, whether you’re using QuickBooks Online or QuickBooks Desktop.

Step-By-Step Guide for Adding Inventory in QuickBooks Online

Step 1: Turn on Inventory Tracking

Begin by signing in to your QuickBooks Online account using your credentials. You’ll be redirected to the QuickBooks Online dashboard. 

• Navigate to the “Settings” menu by clicking the “Gear” icon

• Select “Account and settings.” 

• Choose the “Sales” tab.

• Click “Edit” in the “Products and Services” section

• Enable the “Show Product/Service column on sales forms.”

• Optionally, enable “Price rules for flexible pricing,” turn on “Track quantity and price/rate,” and “Track inventory quantity on hand.” 

• Select “Save” and then “Done.”

Step 2: Access the Products and Services Menu

Navigate to the Settings menu by clicking the “Gear” icon. Under the “Lists” menu, click the “Products and Services” option. This action will take you to the Products and Services page, where you can manage your inventory items.

Step 3: Create a New Inventory Item

Click the "New" button in the upper right corner of the Products and Services page.

A drop-down menu will appear. Select "Inventory" from the list of options. This process will prompt QuickBooks Online to guide you through adding an inventory item.

Step 4: Enter the Item Details

In the “New Item” window, you must enter specific details for your inventory item. Here’s what you need to fill in:

Item Name: Enter a unique name or identifier for your inventory item.

SKU: If applicable, input a stock-keeping unit or any other identifier you use for this item.

Category: You can group and organize inventory items to simplify inventory control and analysis.

Sales Price/Rate: Specify the selling price of the item.

Income Account: Select the appropriate income account to track the sales revenue generated by this item.

Expense Account: Choose the expense account corresponding to the cost of goods sold for this item.

Initial Quantity on Hand: Enter the current quantity of the item you have in stock.

As of date: Specify the date from which you want QuickBooks Online to start tracking this item.

Reorder Point: The minimum inventory quantity triggers a reminder to reorder items, ensuring you maintain sufficient stock levels and avoid stockouts.

Purchasing Information: Purchasing information encompasses supplier/vendor details, item cost, expense account, and preferred vendor.

Step 5: Save and Close

Review the entered details to ensure accuracy. Once verified, click the “Save and Close” button to add the inventory item to QuickBooks Online.

A Step-By-Step Guide to Adding Inventory in Quickbooks Desktop

Step 1: Turn on Inventory Tracking

Begin by launching QuickBooks Desktop and opening your company file. Once you log in, QuickBooks Desktop will direct you to its home screen.

• Select "Edit" from the top menu and choose "Preferences."

• In the “Preferences” window, click "Items & Inventory" in the left-side menu.

• Check the box "Inventory and purchase orders are active."

• Optionally, configure additional preferences, like “Warn about duplicate purchase order numbers,” “Warn if there is not enough inventory to sell,” and “Don’t allow negative quantities” as needed.

• Click "OK" to save the changes.

Step 2: Access the Item List

Navigate to the top menu and select “Lists.” From the dropdown menu, click “Item List.”

Step 3: Create a New Inventory Item

In the “Item List” window, click on the “Item” menu and select “New.” This will open a new window where you can create a new item.

Step 4: Specify the Item Type

In this “New Item” window, you’ll need to specify the type of the item. Choose “Inventory Part” from the list of item types. 

Step 5: Enter Item Details

Fill in the required information for your inventory item. Here’s what you need to provide:

Item Name/Number: Enter a unique name or number to identify the inventory item.

Description: Optionally, provide a brief description of the item.

Cost: Specify the price at which you purchase the item.

Income Account: Choose the appropriate income account to track the sales revenue for this item.

Expense Account: Select the expense account corresponding to this item's cost of goods sold (COGS).

Asset Account: Specify the asset account where you want to track the inventory value.

Quantity On Hand: Enter the initial quantity of your stock item.

Step 6: Additional Details

QuickBooks Desktop provides additional fields to capture more information about your inventory item. You can fill in the following details if applicable:

Manufacturer’s Part Number: Enter the manufacturer’s part number for the item.

Reorder Point: Specify the quantity you want to reorder the item.

Preferred Vendor: Indicate the name of the preferred vendor for purchasing this item.

Tax code: Assign a tax code if applicable.

Step 7: Save and Complete

Review the entered information to ensure accuracy. Once satisfied, click the “OK” button to add the inventory item to QuickBooks Desktop.

FAQs

Q1: What Is the Purpose of Adding Inventory in QuickBooks?

Adding inventory in QuickBooks allows you to track stock levels, sales, and cost of goods sold. It helps you maintain accurate records, make informed business decisions, and streamline inventory management processes.

Q2: Can I Add Inventory Items in QuickBooks Online and QuickBooks Desktop?

Yes, you can add inventory items in both QuickBooks Online and QuickBooks Desktop. The steps may vary slightly between the two versions, but the core process remains unchanged.

Q3: How Do I Access the Inventory Management Feature in QuickBooks Online?

In QuickBooks Online, you can access the inventory management feature by navigating to the "Settings" menu by clicking the "Gear" icon. Under the "Lists" menu, click the "Products and Services" option. This action will take you to the Products and Services page, where you can manage your inventory items.

Q4: How Do I Access the Inventory Management Feature in QuickBooks Desktop?

In QuickBooks Desktop, you can access the inventory management feature by navigating to the top menu, selecting “Lists,” and clicking “Item List.” The “Item List” window will allow you to add, edit, and manage your inventory items.

Q5: What Information Do I Need to Provide When Adding Inventory Items in Quickbooks?

When adding inventory items, you typically must provide details, such as the item name or number, description, cost, income account, expense account, asset account, and initial quantity on hand. Optionally you can include additional details like the manufacturer's part number, reorder point, preferred vendor, and tax codes.

Q6: Can I Set Up Different Income and Expense Accounts for Different Inventory Items?

Yes, QuickBooks allows you to set up various income and expense accounts for each inventory item. This will enable you to track revenue and cost of goods sold for each item.