How to manage inventory in quickbooks online

Are you tired of keeping track of your inventory manually? Do you often find yourself struggling to keep up with the demand of your products? Well, the good news is that QuickBooks Online has a solution for you. With QuickBooks Online’s inventory management feature, you can easily track your inventory levels, sales, and purchases all in one place. In this article, we’ll dive into the ins and outs of QuickBooks Online’s inventory management, and show you how it can help you streamline your business operations. So, whether you’re a small business owner or just starting out, keep reading to learn how QuickBooks Online can help you succeed.

How to Manage Inventory in QuickBooks Online

If you’re a small business owner, managing inventory is a crucial part of your operations. Keeping track of what you have in stock and what needs to be replenished is essential for smooth functioning. And, if you’re using QuickBooks Online for your accounting, you’re in luck because it comes with a built-in inventory management system. In this article, we’ll take a deep dive into how to manage inventory in QuickBooks Online.

Set Up Your Inventory in QuickBooks Online

Before you can start managing your inventory, you need to set it up in QuickBooks Online. Here’s how:

1. Go to the Gear icon and select Products and Services.
2. Click on the New button and choose Inventory.
3. Enter the name of the product, SKU, and description.
4. Set the initial quantity on hand and the cost per item.
5. Choose the account where you want to track the inventory value.
6. Click Save and you’re done.

Track Your Inventory Levels

Now that your inventory is set up, you can start tracking your levels. QuickBooks Online automatically updates your inventory levels when you sell or purchase items. You can view your inventory levels by going to the Products and Services page and clicking on the item you want to check. You’ll see the quantity on hand, quantity on sales orders, and quantity on purchase orders.

Set Reorder Points

To ensure that you never run out of stock, you can set reorder points in QuickBooks Online. A reorder point is the minimum quantity you want to have on hand before you order more. Here’s how to set a reorder point:

1. Go to the Products and Services page and click on the item you want to set a reorder point for.
2. Click the Edit button and scroll down to the Reorder point field.
3. Enter the minimum quantity you want to have on hand before you reorder.
4. Click Save and you’re done.

Create Purchase Orders

When it’s time to reorder inventory, QuickBooks Online makes it easy to create purchase orders. Here’s how:

1. Go to the Purchase Orders page and click on New Purchase Order.
2. Choose the vendor you want to order from and select the items you want to order.
3. Enter the quantity you want to order and the expected delivery date.
4. Click Save and QuickBooks Online will automatically update your inventory levels when the items arrive.

Track Inventory Costs

In addition to tracking inventory levels, QuickBooks Online also allows you to track inventory costs. This is important because it helps you determine the cost of goods sold and the profitability of your products. To track inventory costs:

1. Go to the Products and Services page and click on the item you want to track.
2. Click the Edit button and scroll down to the Cost field.
3. Enter the cost per item.
4. Click Save and QuickBooks Online will automatically track the cost of the item when it’s sold.

Run Inventory Reports

QuickBooks Online offers a variety of inventory reports that can help you make informed decisions about your inventory. Here are a few reports you might find useful:

1. Inventory Valuation Summary: This report shows the total value of your inventory.
2. Inventory Stock Status by Item: This report shows the quantity on hand, quantity on sales orders, and quantity on purchase orders for each item.
3. Inventory Valuation Detail: This report shows the value of each inventory item and the transactions that have affected its value.

Use Third-Party Apps

If you need more advanced inventory management features, you can use third-party apps that integrate with QuickBooks Online. Some popular options include:

1. SOS Inventory: This app offers advanced inventory management features like serial number tracking and lot tracking.
2. Fishbowl: This app offers inventory management features as well as manufacturing and warehouse management.
3. TradeGecko: This app offers inventory management features as well as sales order and purchase order management.

Conclusion

Managing inventory in QuickBooks Online doesn’t have to be a daunting task. With the built-in inventory management system, you can easily track your inventory levels, set reorder points, create purchase orders, track inventory costs, and run inventory reports. And, if you need more advanced features, there are plenty of third-party apps that can help. By staying on top of your inventory, you’ll be able to make informed decisions about your business and keep things running smoothly.
One important aspect of inventory management is keeping track of your inventory turnover rate. This is the rate at which you sell and replace your inventory. A high turnover rate means that you’re selling your products quickly, while a low turnover rate could indicate that you’re overstocked or not selling enough. QuickBooks Online offers a report called the Inventory Turnover Ratio, which can help you determine your turnover rate and make informed decisions about your inventory.

Another feature of QuickBooks Online’s inventory management system is the ability to create bundles or kits. These are groups of products that are sold together. For example, if you sell a gift basket that includes multiple items, you can create a bundle in QuickBooks Online that includes all the items in the basket. This makes it easier to track your inventory and sales for these bundled products.

If you have multiple locations or warehouses, QuickBooks Online’s inventory management system can also help you keep track of inventory across all locations. You can set up different locations in QuickBooks Online and track inventory levels and costs for each location separately. This can be useful if you need to transfer inventory between locations or if you want to see how each location is performing.

Finally, QuickBooks Online offers integration with e-commerce platforms like Shopify and WooCommerce. This means that if you sell products online, you can automatically sync your online sales with your inventory in QuickBooks Online. This can save you time and reduce the risk of overselling or underselling your products.

In conclusion, managing inventory in QuickBooks Online is essential for small business owners. With its built-in inventory management system and integration with third-party apps, QuickBooks Online offers a variety of tools to help you track your inventory levels, costs, and turnover rate. By staying on top of your inventory, you can make informed decisions about your business and keep things running smoothly.

Frequently Asked Questions

How do I set up inventory in QuickBooks Online?

To set up inventory tracking in QuickBooks Online, go to the Gear icon, choose Products and Services, and then select New. From there, you can create an item name, SKU, and select the appropriate category and unit of measure. You can also input the starting quantity and cost of the item.

How do I add inventory to QuickBooks Online?

To add inventory to QuickBooks Online, you can either manually enter the information or import it from a CSV file. To manually enter inventory, go to the Gear icon, choose Products and Services, and then select New. From there, you can input the item name, SKU, category, unit of measure, and starting quantity and cost. To import inventory from a CSV file, go to the Gear icon, choose Import Data, and then select Products and Services.

How do I track inventory in QuickBooks Online?

To track inventory in QuickBooks Online, you can run inventory reports that show the quantity on hand, quantity sold, and cost of goods sold. You can also set up alerts to notify you when inventory levels are low or out of stock. To access inventory reports, go to the Reports tab, select Inventory, and then choose the report you want to run.

What is the average cost method for inventory in QuickBooks Online?

The average cost method is a way to value inventory in QuickBooks Online. With this method, QuickBooks calculates the average cost of all items in inventory, and then assigns that cost to each item sold. This method is useful for businesses that have a large number of products and want to simplify their accounting processes.

Key Takeaways:

• Setting up inventory in QuickBooks Online involves creating product and service items with relevant information such as name, SKU, category, and unit of measure.
• You can add inventory manually or import it from a CSV file, and then track it through inventory reports and alerts.
• The average cost method is a way to value inventory in QuickBooks Online, and is a useful tool for businesses with a large number of products.

Conclusion:

Managing inventory in QuickBooks Online can help businesses keep track of their products and streamline their accounting processes. With the ability to set up, add, and track inventory, as well as use the average cost method for valuation, businesses can make informed decisions about their inventory levels and costs. By utilizing these features, businesses can improve their financial management and increase their overall efficiency.