How to Track Inventory in Quickbooks

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Have you ever received a purchase order from a customer and wondered how much inventory you have on hand? Are you counting inventory to make sure you have enough to fulfill a customer's purchase order? Your QuickBooks software has inventory components like most accounting software; however, businesses often do not use the feature, due to a lack of instruction or training. Using your QuickBooks software, you can set up inventory, track quantities and manage orders and delivery dates from a few simple screens.

Things You'll Need

  • QuickBooks Software
  • Purchase order for invoice
  • Inventory invoice
  • Open your copy of QuickBooks. Locate the "Edit" button on the top menu bar and left mouse click, and select the "preferences" button. Choose the items and inventory button on the left side of the preferences window, and select the company preferences tab. Check the box to the left of the line stating inventory and purchase orders are active. You have enabled the inventory function within your QuickBooks software.

  • Select the "List" button located on the top menu bar. A drop down menu will appear with an option for Item List. Choose the Item List and expand out the new window. Right click your mouse and select "New." In the new window, select "Inventory Part." Select an item name and description, rate and tax code. Your account should always be cost of goods sold. Click "Okay," and your inventory item is set up. Set up the remaining inventory parts for your business. Return to the home screen.

  • Click on the "Purchase Order" button in the upper right hand corner of the home page. Select your vendor, date, P.O. number and shipping address. Left click your mouse in the upper right portion of the item column. Choose the inventory item, quantity and rate from your purchase order and the description and amount will auto populate. Save and close the purchase order when all your items are complete on the screen.

  • Navigate to the "Receive Inventory" button and choose the "Receive Inventory with Bill" option. Select the vendor from the purchase order you just saved, and a box will appear stating pending item receipts exist for this vendor. Click "Okay" and the information from your purchase order will populate in your bill. Save and close, which moves the bill to your bill payment area, and adds the new inventory to the system.

  • Review your inventory stock by status report by clicking on the "Reports" button on the top menu bar, holding your mouse over "Inventory" and selecting the report. Review on hand quantity, on sales order quantity and available quantity with order and next delivery dates. Drill down on any numbers you see on your inventory-stock-by-item report by double clicking when you see the magnifying glass replace your mouse cursor. Inventory item quick reports will populate on the screen displaying the detail that comprises the number you double clicked. Change the date range in the upper center portion of the report to see additional history.

  • Adjust your inventory quantities by clicking the vendor button on the top menu bar, moving your mouse to inventory activities and selecting the "Adjust Quantity/Value on Hand" button. Make adjustments when you have discrepancies in physical counts compared to book counts, or your value declines. Use the Intuit Community to seek answers and advice for advanced questions pertaining to your situation.

Tips & Warnings

  • QuickBooks uses the average cost method for inventory costs.
  • Do not forget to add shipping costs to total cost of your purchase order.

References

  • QuickBooks 2009, The Missing Manual; Bonnie Biafore; 2009
  • Photo Credit WebbCountyTax,Texas/morguefile.com
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