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How should I decide whether to use QuickBooks inventory?

You will generally choose to track inventory in QuickBooks if your company:

  • purchases and resells products

and/or

  • assembles and sells products

You should not use QuickBooks to track inventory if your company uses a third-party solution (another piece of software) to track inventory.

What you can do with inventory in QuickBooks:

If your business purchases items ready for resale, keeps them in inventory, and then sells them, QuickBooks can track the current number in stock and the value of your inventory after every purchase and sale. QuickBooks can even keep track of products you assemble and resell (finished goods). QuickBooks deducts component units from the materials/parts inventory when you build assembly items and adds the assembled units to the finished goods inventory. You can also track how much inventory you have at different locations/sites with the Advanced Inventory add-on which is only available in QuickBooks Enterprise Solutions (additional fees may apply). Learn more at www.qbes.com/inventory.

Here are the benefits of setting up inventory parts as items and using QuickBooks inventory tracking:

  • When you use purchase orders for inventory items, you'll know which items are on order and when they're due to be received. QuickBooks updates your inventory quantities when you receive the items.

  • You can easily see the average cost of the items you have sold (the cost of goods sold).

  • You can easily track profits you receive from the sale of inventory items.

  • You always know the current quantities and value of the inventory on hand.

  • You can create a bill of materials that makes up an assembly item. You can edit, view, and print the bill of materials. (QuickBooks Premier or Enterprise edition only).

  • You can include non-inventory items such as service, non-inventory parts, and other charges in a bill of materials. These item types let you include labor and other expenses in an assembly item. (QuickBooks Premier or Enterprise edition only).

  • Sales people can see whether items are available to ship, and if not, when the next order is due to arrive. (QuickBooks Premier: Retail, Manufacturing & Wholesale, Accountant or Enterprise editions only).

  • You can batch print pick lists, packing slips, and sales orders (including backorders). (QuickBooks Premier: Retail, Manufacturing & Wholesale_Accountant, Accountant or Enterprise editions only).

What you can't do with inventory in QuickBooks:

  • Track an item stored in multiple locations if you don't have the Advanced Inventory add-on which is only available in QuickBooks Enterprise Solutions (additional fees may apply). Learn more at www.qbes.com/inventory

  • Track an item by serial number or lot number.

  • Calculate unit of measure conversions.

  • Track things you use but don't sell (like office supplies).

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