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Creating a non-inventory item

From: QuickBooks Pro 2010 Essential Training

Video: Creating a non-inventory item

If you purchase products specifically for work you're doing for a customer or to stock up your supply closet, you don't need inventory. You purchase those products and use them without ever tracking how many you have on hand. If you buy products specifically for a customer, you can make them billable to your customer. When you invoice the customer, QuickBooks can figure out your profit based on what you paid for the items and what you charged. For products you buy to run your business, the items show up only as an expense to your company.

Creating a non-inventory item

If you purchase products specifically for work you're doing for a customer or to stock up your supply closet, you don't need inventory. You purchase those products and use them without ever tracking how many you have on hand. If you buy products specifically for a customer, you can make them billable to your customer. When you invoice the customer, QuickBooks can figure out your profit based on what you paid for the items and what you charged. For products you buy to run your business, the items show up only as an expense to your company.

The money trail for non-inventory is simpler than the one for inventory, because you don't keep these products on hand. When you buy products, the money, say $500, comes out of your checking account and that's a credit in the checking account. The money you spent on inventory shows up in an expense account, because it is a cost you incur. That's a debit in the expense account. Then when you sell products, an income account gets a credit for what you charge the customer, say $1,000.

The customer owes you money so your accounts receivable account gets a debit for the sell amount, the same $1,000. QuickBooks calculates your profit by subtracting the product expense from the income you earned. To create a non-inventory part item, open the Item List and then click Item > New. In the New Item dialog box, choose Non -inventory Part in the dropdown list. In the Item Name/Number box, type a name for the product.

You can create sub-items to organize your items just like you do with services or inventory by turning on the Subitem of checkbox. If you don't buy the product for a customer, leave the This item is used in assemblies or is purchased for a specific customer job checkbox turned off. All you have to do is tell QuickBooks about the purchase of the product. You fill in the description, which will appear on purchase orders or bills. The price is what you pay for the item.

The tax code tells QuickBooks whether you pay sales tax on it, and the account is the account you used to track the expense. But if you buy the products for customer work, turn on that This item is used in assemblies or is purchased for a specific customer job checkbox. Like you did with the service item, you tell QuickBooks about purchase info and sales info. In this case, the expense side might be Office Supplies, but the Income Account will be Product Income.

If you sell an item to a customer, the cost is what you pay for the item; the sales price is what you charge the customer for one unit of the product. If you choose a vendor in the Preferred Vendor dropdown list, QuickBooks automatically fills in a purchase order for this item with that vendor. On the sales side, you see the Tax Code box only if you turn on the sales tax feature. Make sure to choose Tax in the Tax Code dropdown list, if the product is taxable.

If you want to create another item, click Next, or to save this item and close the dialog box, click OK. After you create a non-inventory item, you can edit to a purchase order, bill, invoice or sales receipt. QuickBooks tracks the money trail just like it does for inventory.

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This video is part of

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QuickBooks Pro 2010 Essential Training

69 video lessons · 22023 viewers

Bonnie Biafore
Author

 
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  1. 8m 19s
    1. Welcome
      52s
    2. Editions of QuickBooks
      3m 24s
    3. QuickBooks bookkeeping basics
      2m 46s
    4. Using the exercise files
      41s
    5. Disclaimer
      36s
  2. 9m 12s
    1. Opening a company file
      2m 4s
    2. Using the QuickBooks menus and home page
      2m 49s
    3. Touring the Customer, Vendor, and Employee Centers
      2m 32s
    4. Navigating between QuickBooks windows
      1m 47s
  3. 10m 50s
    1. Gathering the information you need
      2m 4s
    2. Creating a company file
      5m 33s
    3. Converting from another program
      3m 13s
  4. 8m 19s
    1. Naming and numbering accounts
      3m 36s
    2. Creating an account
      2m 26s
    3. Making an account inactive
      2m 17s
  5. 14m 50s
    1. Creating a customer profile
      3m 40s
    2. Adding customer information
      4m 33s
    3. Creating a job
      2m 18s
    4. Making customers inactive
      1m 39s
    5. Creating a vendor
      2m 40s
  6. 43m 35s
    1. Why use QuickBooks items?
      2m 59s
    2. Creating a service item
      4m 26s
    3. Setting up time tracking
      2m 53s
    4. Entering time
      4m 19s
    5. Tracking mileage
      4m 34s
    6. Creating an inventory item
      6m 7s
    7. Creating a non-inventory item
      3m 34s
    8. Setting up sales tax
      6m 59s
    9. Setting up discounts and charges
      3m 46s
    10. Creating a group of items
      2m 16s
    11. Making items inactive
      1m 42s
  7. 30m 46s
    1. Creating a purchase order
      3m 8s
    2. Entering a bill
      4m 37s
    3. Recording inventory you receive
      3m 47s
    4. Paying bills
      4m 5s
    5. Handling a credit from a vendor
      5m 2s
    6. Writing a check for expenses
      3m 17s
    7. Paying with a credit card
      1m 40s
    8. Paying with cash
      2m 53s
    9. Paying sales tax
      2m 17s
  8. 35m 5s
    1. Understanding invoices, statements, and sales receipts
      2m 23s
    2. Creating an invoice and filling in header fields
      2m 55s
    3. Adding items to an invoice
      5m 7s
    4. Adding billable time and cost to an invoice
      5m 57s
    5. Using subtotals, discounts, and other charges
      3m 6s
    6. Creating an estimate
      2m 49s
    7. Handling a customer credit
      4m 57s
    8. Creating a statement charge
      3m 7s
    9. Producing a statement
      4m 44s
  9. 14m 44s
    1. Setting up print options
      4m 13s
    2. Aligning forms with printer paper
      3m 0s
    3. Printing one or more forms
      4m 29s
    4. Emailing a sales form
      3m 2s
  10. 14m 8s
    1. Receiving a payment
      3m 49s
    2. Assessing finance charges
      4m 9s
    3. Creating a sales receipt for a cash sale
      2m 39s
    4. Depositing payments
      3m 31s
  11. 10m 37s
    1. Preparing to reconcile a bank account
      1m 50s
    2. Reconciling transactions to your bank statement
      3m 14s
    3. Correcting discrepancies
      5m 33s
  12. 9m 51s
    1. Using the Report Center to find reports
      3m 0s
    2. Running a report
      3m 45s
    3. Printing or saving a report
      3m 6s
  13. 6m 8s
    1. Why use journal entries?
      3m 3s
    2. Creating a general journal entry
      3m 5s
  14. 13m 39s
    1. Creating a new user
      4m 58s
    2. Backing up your company file
      6m 10s
    3. Restoring a company file
      2m 31s
  15. 27s
    1. Goodbye
      27s

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