This movie shows how to turn on settings for inventory in QuickBooks Online and how to create inventory products including quantity on hand, asset account, description and price. The movie shows how to fill in sales and expense information. It also shows how to create non-inventory products and services.
- [Voiceover] Before you can start raking in revenue, you have to tell QuickBooks Online about what you sell. That way, when you add those services and products to bills, invoices, and other forms, the software can keep track of everything for you. If you sell inventory, the first thing you have to do is turn on inventory settings. To do that, we're gonna head up to the top right corner of the screen and click the Settings icon. Then over under the Settings category, choose Company Settings. The settings that we want are in the sales category, so I'm gonna choose that, and then look for the row for products and services.
I'm gonna click this row so I can edit these settings. The first two check boxes are already turned on, and that's what I want. I wanna be able to see products and services on my sales forms, and I want to track the quantity and the price or rate. For inventory, I also wanna turn on the third check box, track quantity on hand, and that's because with inventory, you keep that in stock, so you need to know how much you have on hand available to sell.
Now that I've turned on that setting, I'm gonna click Save. You'll see a message that turning on this particular setting, track quantity on hand, also turns on the setting to show the items table on expense and purchase forms, and that's fine with me, in fact, we need it, so I'm gonna click Okay. With the inventory settings turned on, I'm gonna head down to the bottom right corner and click Done. Now let's go to the list of our products and services. To do that, I go back up to the top right corner of the screen and click the Settings icon.
This time I'm gonna go to the lists category and choose products and services. It turns out that QuickBooks Online created a set of products and services for us, based on the industry that we selected when we set up the company. But that doesn't mean that every product and service that we sell is in this list, so let's create some new products and services. I'm gonna head up to the top right corner and click the New button.
When I do that, a panel opens, and there are three different types of products or services that you can create. Inventory item, non-inventory item, and service. We're gonna create one of each type. I'm gonna start with inventory, so I click that row. The panel changes to product/service information, and you can see that the type is inventory item. So I'm gonna start by filling in the name box. I'm gonna add an inventory item for a 16 ounce bottle of extra virgin olive oil.
I type the name that I wanna use in the name box, then I can come down to the SKU box and type the code for this product, so I'll type in the code EV-16. If you have photos of the things that you sell, you can click the Upload button and then choose the photo to add it into QuickBooks Online, but I'm gonna skip that for now. With inventory items, the next thing you have to fill in is your quantity on hand. If you already have inventory, you can add the values and the date in these boxes.
I don't have any at this point, so I'm gonna type zero in the initial quantity on hand box, and I'll use today's date. QuickBooks Online has an account inventory asset. It creates it when you turn on inventory, and that's fine with me, so I'm gonna leave that account as it is. Now I need to scroll down further to add more information about this inventory item. I'm gonna add the sales description in the sales information box. I click that box, and I type in the description.
The next thing is to fill in the sales price, and let's say that that's $12.99. The program selects an income account, but this isn't the one that I wanna use. So I'm gonna click the arrow on the right side of the box, and then find my product sales sub-account in the drop down menu and choose that. The is taxable check box is turned on automatically, because of a setting that we chose when we set up the company to make all new products and services taxable.
In this case, the olive oil isn't taxable, so I'm gonna turn that check box off. Also, if you haven't turned sales tax on, you won't even see that check box. We also have to add purchasing information for this product. I'm gonna start with the description. I click that box and then type in the description. I also have to add what I pay for it when I buy it, so I click the cost box and type in the purchase price.
The expense account is set to cost of goods sold. Now, that's not really an expense account, but that is where I wanna keep track of my expenses when I purchase the inventory, so I'm gonna leave that the way it is. I'm done filling in the fields, so I'm gonna click Save and Close. You can see in the list I now have the extra virgin 16 ounce product in the table. Let's head back up and click the New button a second time. This time around, I'm gonna choose a non-inventory item.
I click that, and the panel changes. I still see similar fields, but it says non-inventory item at the top. I'm gonna start with the name. The item that I don't keep in stock is an antipasta serving platter. I type that in the name box, and then I head to the SKU box and type in the code for this product. Again, you can upload a photo if you have one. Now let's scroll down and go to the sales information section. The check box is turned on, "I sell this "product/service to my customers," which is good, because I do sell the product to my customers.
All I have to do is fill in the description for the sales forms. I type in the description that I wanna see on sales forms, like invoices and sales receipts, then I head to the sales price/rate box, and type in what I sell this serving platter for. The income account is set to sales, and that's not the account that I want. I'm gonna click the arrows and find my product sales sub-account and choose that. The platter is taxable, so I'm gonna leave the is taxable check box turned on.
The last section is for purchasing information. I'm gonna turn on the check box, "I purchase "this product/service from a vendor," and that way, I can see the fields for the purchasing information. We'll start with the description. I'll just type in something simple, serving platter, and then in the cost box I type what I pay for it when I buy it. Expense account is set to purchases, and that's not what I want. I want to use cost of goods sold, so I'm gonna click the arrow, I have to scroll up further to the top of the list of accounts, and then choose cost of goods sold.
Our non-inventory product is done, so I'm gonna click Save and Close. We're gonna head back up to the New button a third time to create a service. At the top right, I click the New button, and this time I choose the third option, which is Service. Just like I did before, I'm gonna type the name, and let's say it's Setup. I'm gonna type in the SKU, and then I can scroll down to the sales information. The check box, "I sell this product/service to my customers" is turned on, which is what I want, so I'm gonna go to the description box and type the description.
In this case, I'm gonna leave the sales price alone, because the price changes depending on the event. In the income account box, I'm gonna click the arrows, because I want to change the account. I'm gonna use the services sub-account, and this service isn't taxable, so I want to make sure to turn off the is taxable check box. For this service, employees in the company are gonna provide the service, so I don't purchase it from a vendor. In that case, I leave the purchasing information check box turned off, and I don't have to fill in any information about purchasing it from someone else.
I'm ready to click Save and Close to save my service. Now in the list I have my antipasta serving platter, it's a non-inventory item, and if I scroll down, I can see that I've got the extra virgin olive oil as an inventory item, and if I scroll down further, I have my setup item. One thing to keep in mind is that you can sort this list by any of these fields. To do that, just click in the heading row.
Let's say that I wanna sort by SKU. I just click in the heading row, and now the products and services are sorted by SKU. If I go over to the top right of the table and click the Print icon, that will print the list of products and services in the sort order that I see on the screen. That's how you create products and services in QuickBooks Online.
- Choosing a QuickBooks Online edition
- Creating an account
- Setting up customers and vendors
- Setting up products and services, billable expenses, and time tracking
- Paying bills
- Creating invoices
- Receiving payments
- Handling refunds
- Setting up online banking accounts
- Running reports
- Paying sales tax
- Automating recurring transactions