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Understanding QuickBooks terms

QuickBooks uses the following terms that you should be aware of:

Term

How this term is used in QuickBooks

Customer

Anyone who pays you. This can be either businesses or individuals who purchase goods or services from you.

Job

A way to divide charges and expenses for single customer into multiple categories.

Vendor

Anyone you pay for services or products, except for employees. This can include businesses that supply you with raw or finished goods, businesses that provide maintenance or repairs, office supply companies, shipping companies, subcontractors, utility companies, your landlord, tax agencies, or suppliers.

If you make a one-time payment, you may choose to add the recipient to the Other Names list so that the company is not included in reports about vendors. If you use the Other Names list, you can move them to the Vendor list later if necessary. If you add them to the Vendor list, you cannot move them to the Other Names list or delete them from QuickBooks.

Item

An item is anything you want to put on an invoice or purchase order. This includes anything that your company buys, sells, or resells in the course of business, as well as any fees or charges (such as shipping charges or rush order fees) that you want to include on invoices. Items can include parts (both raw materials you purchase and finished goods you sell), services, labor, discounts, and taxes.

Assembly Item

An inventory item that is assembled by combining multiple inventory items from your items list. For example: if you sell medical supplies and also make and sell a first aid kit comprised of a box, a label, bandages, antiseptic wipes, antibiotic ointment, aspirin and safety pins—the first aid kit is the assembly item. The components of the assembly item (label, box, and so on) are also inventory items. When you build an assembly item, QuickBooks automatically updates inventory quantities appropriately.

Item list

A list of all items created and available for your company.

Account

An account is set up to track how much money your company has, how much money it owes, how much money you make, and how much you spend. There are several types of accounts available—real world accounts (such as checking accounts), income and expense accounts that you use to group transactions for reporting purposes, equity accounts, and liability accounts.

Chart of accounts

A list of all the created and available for your company. When you set up your QuickBooks company, you can choose a preset chart of accounts designed especially for manufacturing or wholesale/distribution companies.

Class

A way to categorize income and expenses. For example, you can use the Class field to track information about each department, location, profit center, or product type separately.

Manufacturing and wholesale terms

Here are some general business terms that are used by manufacturers, wholesalers, and distributors. This table describes how they are used in QuickBooks:

Manufacturing and wholesale industry terms

How the term is used in QuickBooks

Sales Rep

Someone in an organization assigned to a customer and/or an invoice. For example, the person in your business that takes the orders for that company or an outside rep that is responsible for bringing that customer to you. You can customize QuickBooks forms to view Sales Rep information, and you can also generate reports based on the sales rep to calculate commissions.

Sales Volume

Sales or revenue amount.

Physical Inventory Count

A periodic physical count of the quantities of items you have on hand.

Cycle Counting

Counting a different inventory shelf or section each day, week, or month. Cycle counts allow you to keep a constant watch on your inventory.

Spot-checking Inventory

Checks of specific portions of your inventory at specific intervals. Spot-checking helps determine the accuracy of the inventory quantities in QuickBooks. Spot checks on inventory can help you make sure that transactions are being recorded properly in QuickBooks.

Upfront Deposit

An upfront deposit is money a customer has given to you to spend for tools, materials, supplies, and/or labor for a specific job or order.

Drop Shipments

Having goods sent directly to the customer from a 3rd party.

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