Set Up Inventory in QuickBooks Online
QuickBooks Online has everything you need to manage your inventory. Track what’s on hand, get alerts when it’s time to restock and see insights on what you buy and sell. You can also enter non-inventory products and services so you can quickly add them to your sales forms.
We’ll help you set it all up and get going.
Step 1: Turn on inventory tracking
If you haven’t yet, turn on these settings so you can add your inventory.
- Go to Settings ⚙ and select Account and settings.
- Select Sales.
- Select Edit ✎ in the Products and services section.
- Turn on Show Product/Service column on sales forms.
- Turn on both Track quantity and price/rate and Track inventory quantity on hand.
- Select Save and then Done.
Step 2: Add your inventory products
Now you can add your inventory items as well as other products and services you sell into QuickBooks. This lets you quickly add them as line items to your sales forms. The steps to add inventory, non-inventory, and service items are slightly different:
Add products you want to track as part of your inventory
- Follow the steps to add inventory items. These are products you sell that let you set and track product quantities.
Add everything you buy and sell in your inventory into QuickBooks. Then, let QuickBooks update the quantity on hand as you work so you don’t have to. Once you’re set up, it’s easy to track inventory in QuickBooks and add products to sales forms.
If you buy and sell products and services but don’t track them as part of your inventory, here’s how to add them to QuickBooks.
Step 2.1: Turn on inventory tracking
Make sure to turn on inventory tracking so you can add inventory items.
Step 2.2: Add your product’s name, SKU, and category
Once settings are in order, here’s how to add your inventory products.
Tip: Already keeping track of your products in a spreadsheet? Save time and import all of them at once instead.
- Go to Sales and select Products and services.
- Select New to add a product or service. Then select Inventory.
- Add a Name, SKU, or HSN code for what you’re tracking.
- Select the unit from the Unit ▼ dropdown.
- Select the category from the Category ▼ dropdown.Tip: Categories let you group your products and services together so they’re easier to find.
Step 2.3: Add your product’s quantity, reorder point, and inventory asset account
- Add your product’s Initial quantity on hand. Then enter when you started tracking that quantity in the As of date field.
Note: If you’re new to QuickBooks, initial quantity on hand depends on what date you plan to start tracking your business. For example, if you’ll start tracking from the beginning of your financial year, enter your products’ quantities at that time.
But if you’re simply adding a new product from a supplier, enter “0” as its initial quantity. Then, after saving, track how many of this product you receive from suppliers. This ensures you don’t double its initial quantity.
- Add a Reorder point to get alerts when it’s time to reorder. Is the third rectangle you see.
- Select the Inventory asset account ▼ dropdown and select Inventory Asset. QuickBooks uses this account to track the cost of all the products you have in stock (or inventory value).
Step 2.4: Add your product’s sales, tax, and purchasing info
- Add your product’s description on sales forms. This shows on invoices, cash memo, and other forms you send to customers.
- Add the Sales price/rate.
- Select the Income account ▼ dropdown and find the account you use to track what you sell.
Tip: You can use an income account QuickBooks already set up for you. But if you need a new account, scroll to the top of the dropdown list and select + Add new.
- Select the Inclusive of tax check box, if applicable.
- Select the Tax ▼ dropdown and choose the tax rate to be used for the item. If you don’t see this dropdown, set up GST in QuickBooks.
- Add your product’s description on purchase forms. This will show on bills, purchase orders, and other forms you send to suppliers.
- Add the product’s Cost. If this changes, don’t worry. You can still enter the updated price when you buy supplies.
- From the Expense account ▼ dropdown, select Cost of sales. QuickBooks uses this account to track the cost of products you sell.
- Select the Inclusive of purchase tax check box, if applicable.
- From the Purchase tax ▼ dropdown, select the applicable purchase tax.
- Add Reverse charge %.
- Select a Preferred Supplier. QuickBooks remembers your preferred supplier so you can reorder this product easily.
- Select Save and close.
As you start selling new products, you can use the same steps to set them up.
Change a non-inventory product to inventory
Need to start tracking supply of a product you set up as non-inventory? Change its type to inventory instead of creating a new item.
Do use the above in case you come across a similar situation.