QuickBooks includes several features to assist you in
tracking inventory. You will
generally not choose to track inventory in QuickBooks if:
Your company does not carry inventory.
Your company uses a third-party solution (another piece of software) to
There are several inventory management software systems available. Some of
them are designed to integrate with QuickBooks so that you manage inventory
within the third-party system, but are able to view inventory information
Many third-party software applications have the ability to export journal
entries into a format that can be used by QuickBooks. If you use third-party
inventory software, work with the software vendor or a professional advisor to
help you export data from the inventory software and import it as journal
entries into QuickBooks.
It is important to set up and map the fields from the inventory software to
the fields in QuickBooks. Before doing any imports,
back up all of your QuickBooks data
correctly. After you import information, review your chart of accounts,
your items list, and your financial reports to ensure the entries imported
If your third-party inventory application does not integrate with
QuickBooks, you may still be able to use some data in QuickBooks. Some examples
of this include:
A company that purchases raw goods that aren't easily converted into the
finished product—prune juice. The company buys prunes by the truckload.
After the prunes have been pitted and cleaned, the total weight changes. When
they are ground and combined with water, they are measured by volume rather
than weight. Their juice-industry specific software manages all the costs to
determine the cost of goods sold for each case of juice.
In QuickBooks, the company tracks the raw goods as an asset, but they do not
add items to inventory until the third-party inventory system determines the
cost of goods sold for each unit.
Another company purchases the raw goods to make pizza (flour, tomato sauce,
cheese, etc.) with QuickBooks. They "sell" the goods to another
inventory system that manages the ingredients used to create a pizza.
QuickBooks then "buys" the pizza as an inventory item from the
third-party inventory system and sells it as it would any other inventory