Meritorious Consultants LLC - Managing products and services in QuickBooks Online

Management steps

For managing products and services in QuickBooks Online, follow these detailed steps:

Step 1: Log in to QuickBooks Online

Open your web browser and go to the QuickBooks Online website.
Enter your credentials (email and password) to log in to your QuickBooks Online account.

Once logged in, navigate to the left-hand menu.
Click on Sales (it might appear as "Invoicing" in some versions).
From the drop-down menu, select Products and Services.

Step 3: Add a New Product or Service

On the Products and Services page, click on the New button located at the upper-right corner.
Choose the appropriate type of item you want to create:
- Inventory (for items you buy and sell, and want to track quantity).
- Non-inventory (for items you sell but don’t need to track inventory).
- Service (for services you provide to your clients).
- Bundle (a group of products/services sold together as a package).

Step 4: Fill in Product or Service Details

Once you choose the type of item, you’ll be required to enter details about the product or service. Here’s a breakdown of the fields you’ll need to fill out:

Name: Enter a unique name for the product or service.
SKU (optional): If you have an SKU for the product or service, enter it here.
Category (optional): Organize items into categories for easier management (e.g., “Office Supplies” or “Services”).
Description: Provide a detailed description of the product or service. This is optional but recommended.
Sales price/rate: Enter the price you sell the item or charge for the service.
Income account: Select the income account to link the item. This will determine where the revenue from the sale will be categorized in your financial reports.
- For products, this could be “Sales of Product Income.”
- For services, you might choose “Service Income.”
Purchase information (for products):
- Cost: Enter the cost of the item (for inventory items, this will help calculate profit margins).
- Purchase account: Choose the account that tracks the cost of purchasing the product (like "Cost of Goods Sold").
- Supplier (optional): Link the product to a specific supplier if desired.

Step 5: Inventory Management (if applicable)

If you're setting up an inventory item, you'll need to configure:

Track quantity on hand: Enable this if you want QuickBooks to track your inventory.
Starting quantity: Enter the current inventory quantity.
Starting value: Enter the value of your inventory on hand (for accurate cost of goods sold calculations).

Step 6: Set Up Taxes (if applicable)

If your products or services are subject to sales tax, you’ll need to set the Tax rate. Choose the applicable tax rate, such as Sales Tax or No Tax.
QuickBooks can automatically calculate tax based on your location and tax settings.

Step 7: Save the Item

Once all the necessary fields are filled, click Save and Close or Save and New if you want to add another item.

Step 8: Review Your Products and Services

After saving the items, you'll be taken back to the Products and Services page. Here, you can see the list of all your products and services.
You can edit, delete, or manage the inventory levels (if applicable) directly from this page.

Step 9: Use Products and Services in Transactions

Now that your products and services are set up, you can use them in various QuickBooks transactions, such as:

Invoices: Add products or services to an invoice to bill your customers.
Bills/Expenses: Add items to bills or expense reports when making purchases.
Sales Receipts: Record payments for products and services sold.

By following these steps, you can efficiently set up and manage products and services in QuickBooks Online for smooth financial tracking and reporting.

Advanced features of managing Products and Services

To explore the advanced features of managing Products and Services in QuickBooks Online, follow these steps. These advanced features provide deeper control over inventory management, tracking, and automation for your business needs.

Step 1: Access the "Products and Services" Page

Log in to QuickBooks Online.
From the left-hand menu, go to Sales and select Products and Services.

Step 2: Set Up Inventory Tracking (Advanced)

If you want to track inventory and manage stock levels, you need to set up Inventory items. This includes advanced features like automatic stock tracking, inventory valuation, and reorder points.

a. Enable Inventory Tracking

From the Products and Services page, click New and select Inventory.
QuickBooks will ask if you want to turn on inventory tracking if it's not already enabled. If not already done, click Turn on Inventory Tracking.

b. Enter Detailed Product Information
When setting up an inventory item, you’ll enter more specific data:

Inventory Name: Unique name for your item (e.g., “Red Widget”).
SKU (optional): Stock-keeping unit (a unique code for internal use).
Category: Categorize products (e.g., “Electronics,” “Clothing”).
Description: Add a detailed product description (visible to customers).
Sales Price/Rate: Set the sales price.
Cost: Set the cost of the product (important for profit margin calculations).
Account: Link the item to the appropriate income account for sales and cost of goods sold (COGS) account for purchases.
Track Quantity on Hand: Enable this to allow QuickBooks to track inventory.
Starting Quantity: Enter the amount of inventory you currently have on hand.
Starting Value: Input the total value of inventory for accurate profit calculations.

c. Enable Reorder Points
For Inventory items, QuickBooks lets you set reorder points to avoid stockouts:

Reorder Point: Set the quantity at which you want QuickBooks to alert you to reorder stock.
Preferred Supplier: Select the supplier you usually buy from to automate purchase orders.

Step 3: Set Up Bundles

QuickBooks Online allows you to create Bundles, which group multiple products or services together as a package. This feature is ideal for selling sets of items at a discounted price.

a. Create a Bundle

From the Products and Services page, click New and select Bundle.
Add products and services you want to include in the bundle.
Set a bundle price and assign an income account.
QuickBooks will automatically track the components of the bundle as individual items when sold.

Step 4: Advanced Sales and Purchase Tracking

You can enhance the way you track your products by setting up detailed sales and purchase features:

a. Track Sales by Location
If you have multiple sales locations, QuickBooks allows you to assign products and services to different locations.

Navigate to Settings > Account and Settings > Advanced.
Under Categories, enable Track locations. This allows you to associate products with specific locations.
When adding inventory items, assign them to specific locations to track stock at each location.

b. Track Sales and Purchase by Customer and Supplier
You can link products/services directly to specific customers or suppliers for better reporting.

For Sales: Link an inventory item to a specific customer by selecting the item when creating an invoice.
For Purchases: Link an inventory item to a supplier when creating a bill.

Step 5: Set Up Custom Pricing and Discounts

QuickBooks Online provides the ability to set custom pricing for specific customers or provide discounts on certain products.

a. Custom Pricing for Customers

Go to Sales > Customers and select a customer.
Click Edit on the customer profile, and under the Payment and billing section, click Custom Pricing.
Set specific price levels for the customer on specific products/services.
- For example, you can offer a 10% discount on a product for a particular customer.

b. Discounts on Products/Services

When creating an invoice, you can apply a discount to individual items.
Add the discount line on the invoice and specify the percentage or amount.

Step 6: Set Up and Use Automated Reordering

For inventory items, QuickBooks can automatically generate purchase orders when stock reaches a certain threshold.

a. Set Up Automatic Purchase Orders

Go to Settings > Account and Settings > Expenses.
Enable Purchase Orders.
For each product, set a reorder point and preferred supplier. When inventory runs low, QuickBooks will notify you and generate purchase orders automatically.

Step 7: Manage Inventory Valuation

QuickBooks Online uses two methods to value inventory: FIFO (First In, First Out) and Average Cost.

a. Select Inventory Valuation Method

Go to Settings > Account and Settings > Advanced.
Under the Inventory section, choose between FIFO or Average Cost to determine how QuickBooks will calculate inventory value and cost of goods sold (COGS).
- FIFO: Assumes the first item purchased is the first one sold.
- Average Cost: Averages the cost of all inventory items on hand.

Step 8: Reporting and Analytics

You can get more advanced with product and service reporting by customizing reports:

a. Customize Reports

Go to Reports from the left menu.
Under Sales, choose reports like Sales by Product/Service, Inventory Valuation Summary, or Inventory Stock Valuation.
Customize the report filters to drill down into specific products, sales periods, or customer types.

b. Inventory Reports

Inventory Valuation Detail: Tracks inventory levels, sales, and purchases per item.
Sales by Product/Service: Shows total sales by product or service.

Step 9: Use QuickBooks Apps for Additional Features

QuickBooks Online supports a wide range of apps that enhance your product and service setup:

a. Inventory Management Apps

TradeGecko (now QuickBooks Commerce) for advanced inventory management features.
SOS Inventory: Offers more granular control over inventory tracking and reporting.

b. Integrate with eCommerce Platforms
QuickBooks integrates with platforms like Shopify and Amazon, automatically syncing product listings, inventory, and sales data.

By using these advanced features, you can fine-tune your QuickBooks Online product and service setup to automate inventory management, apply custom pricing, streamline purchasing, and gain deeper insights into your business’s financial health.

Managing products and services in QuickBooks Online