Tracking Products and Services with QuickBooks Online, Part 1
Updated: May 15
What products and services does your company sell? Do you have enough to fulfill existing and future orders? If you don't know the answer to the question, we've got good news: QuickBooks Online can help.
Most retail-based small businesses maintain a changing inventory of multiple products. Even if you sell one-of-a-kind goods, you should have an exact idea of what you’ve sold and what product is available at all times. And if your company sells services, it can also be important to track what you’re able to offer customers.
QuickBooks Online can meet these needs. The software allows you to create detailed records for both products and services. For inventory-based businesses, QuickBooks Online can ensure you always know what’s available to sell. When you enter sales and purchase transactions, the site draws on the records you’ve created to help you complete invoices, sales receipts, purchase orders, and more, without having to exit the form you’re working on.
You'll have to set up your product and service records to start, but as long as you’re conscientious about maintaining these records, your business will feel the payoff. With these systems in place, you’re less likely to run short on inventory or end up with products that aren’t moving fast enough.
Preparing QuickBooks Online
Before you begin creating records and tracking inventory, you need to make sure that QuickBooks Online is set up correctly. Click the gear icon in the upper right. Under Your Company, click Account and settings. Click the Sales tab in the toolbar. You’ll see the Products and services section near the middle of the screen.
Make sure you’ve turned on the Products and services features you’re going to need.
Toggle the slider buttons on and off by clicking on them, and be sure to save your changes once they're complete. One option allows you to turn on price rules. This is still currently classified as a beta feature, but it’s live on the site. Price rules can be quite complicated to set up, and there's also the possibility that doing so can create confusion for your customers, leading to revenue loss, if these rules are not set up correctly. If you're interested in using this tool, reach out to us! We'll ensure that this process goes right the first time.
Creating Your Product and Service Records
Your first task, of course, is to build your product and service records. Hover your mouse over Sales in the left vertical toolbar on the home page and select Products and Services. The screen that opens is your home base for dealing with inventory and services. Eventually, it will contain a detailed table containing information about both. Two large buttons at the top of the page warn you when you have Low Stock or you’re Out of Stock.
Click New in the upper right corner. A vertical panel slides out from the right displaying four options for Product/Service information. They are:
Inventory. If you buy and/or sell products whose quantities you must track, these items are considered inventory.
Non-inventory. You may have products that you buy and/or sell, but you don’t need to track the amount you have in stock. These are considered non-inventory.
Service. These are, well, services that you provide to customers, like landscaping or web design. You might sell these by the hour or project, for example.
Bundle. You might call these assemblies. Bundles are multiple products and/or services that you sell as a package for one price.
Click on Inventory for this example. Here is a partial view of the pane you’ll see:
You can track your inventory levels and reorder points when you create inventory product records in QuickBooks Online.
To create a product or service record, just fill in the blanks on the form and save it. Some fields are optional. In fact, only three are required: Name, Initial quantity on hand, and As of date. Check with us on the accounting implications of updating information of adding an Initial quantity on hand. Of course, your inventory tracking and the use of product and service records in transactions and reports will be much more effective if you complete as many of the fields as possible. We recommend that you at least provide answers in some additional fields (some of which aren’t shown here), including:
Category (will be useful in reports, for example)
Reorder point (will keep you from running out of items)
Inventory asset account (you can leave the default, Inventory Asset)
Description (for sales forms)
Sales price/rate (what the customer will be charged)
Description (for purchase forms)
Cost (what you pay to buy it)
Expense account (often Cost of Good Sold, but you can ask us to be sure)
Part 2 discusses how QuickBooks Online makes these records available as you complete other tasks, like transactions. Read it here: