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Inventory requires more care and feeding than other types of things that you sell, because you have to keep track of it from the time you buy it to when your customers pay for the inventory you've sold. Even the initial purchase of inventory is more complicated than buying office supplies or services. Although bills usually come with a shipment of the inventory, you might receive the bill before or after the inventory arrives. QuickBooks has commands for recording bills and inventory shipments regardless of when they do arrive. A bill accompanying a shipment of inventory is the most common situation and QuickBooks has a command that handles both of these tasks at the same time.
On the homepage click Receive Inventory and then choose Receive Inventory with Bill on the shortcut menu. The Enter Bills window opens because you're going to enter a bill for the inventory that arrived. In the Vendor dropdown list choose the vendor who sent the bill. QuickBooks fills in the Vendor box with the vendor's name. If you don't have a purchase order for the shipment, you'll have to fill in the bill's fields the way you would with a regular bill. However, if you have unfilled purchase orders for that vendor, a message box asks if you want to receive the inventory against one of them.
The great thing about using an open purchase order is that it fills in the bill's fields for you. In the message box click Yes. The Open Purchase Orders dialog box opens with a list of the POs for that vendor. You can also open the Open Purchase Orders dialog box by clicking Select PO below the table. Click the PO you want to use to turn on its checkbox and then click OK. QuickBooks uses the purchase order to fill in the Amount Due in all the fields for the items on the purchase order.
If the date QuickBooks fills in doesn't match the bill, choose the correct date. When you move to another field QuickBooks calculates the bill due date based on the vendor's terms. If you want to record the vendor's invoice number or another ID for the bill type it in the Ref Number box. Sometimes the shipment you receive doesn't exactly match what you ordered, say the quantities are short or the vendor cut you a deal on some of the prices. Because the purchase order doesn't post any numbers to your accounts, you can change quantities and prices on the bill, even change the items, before you save the bill and add the inventory to your records.
When you're done click Save and New to save the bill and receive the inventory and create another bill or to just save the bill and close the dialog box, click Save and Close. To see the results of receiving inventory, look at the item list. The On Hand column shows the number you have on hand for each inventory item that you receive. The value of the inventory goes into the inventory asset account. In the Chart Of Accounts window double- click Inventory Asset and you can see the value of that inventory that you received.
If you receive the inventory without a bill, the easiest thing to do is to use the Receive Inventory with Bill command. When you receive the bill, you can edit the one in QuickBooks to match the one the vendor sends, or you can click Receive Inventory and choose Receive Inventory Without Bill. Then when the bill comes, you click Enter Bills Against Inventory to record the bill for the inventory you already have. Either way the results are the same.
Whether or not you receive bills and inventory at the same time, you pay inventory bills just like you do other bills. You'll learn how to do that later in this chapter.
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