Enabling Inventory Tracking in QuickBooks

Enabling inventory tracking in QuickBooks is a crucial step if you need to keep track of your products, their quantities, and their values. QuickBooks offers several versions, including QuickBooks Online and QuickBooks Desktop, and the process for enabling inventory tracking may vary slightly depending on the version you are using. Here are general steps you can follow:

QuickBooks Online:

1. Login to QuickBooks Online: Log in to your QuickBooks Online account using your credentials.
2. Set Up Inventory: If you haven’t already set up your products and services as inventory items, you’ll need to do this first. To do so, go to the “Sales” menu and select “Products and Services.” Click the “New” button and choose “Inventory” as the type.
3. Enable Inventory Tracking:
   • After you’ve set up your inventory items, click the “Gear” icon in the upper-right corner.
   • Under “Your Company,” select “Account and Settings.”
   • In the left sidebar, choose “Sales.”
   • In the “Products and services” section, check the box that says “Track inventory quantity on hand.”
   • Click “Save” or “Done” to save your settings.
4. Adjust Inventory: After enabling inventory tracking, you can adjust your inventory levels whenever you buy or sell items. To do this, go to the “Sales” or “Purchases” menu, create or open a transaction, and enter the quantity of items you’re buying or selling.

QuickBooks Desktop:

1. Open QuickBooks Desktop: Launch QuickBooks Desktop and open your company file.
2. Set Up Inventory Items: If you haven’t set up inventory items yet, go to the “Lists” menu and select “Item List.” Click the “Item” button and choose “New.” Then, select “Inventory Part” or “Inventory Assembly,” and enter the item details.
3. Enable Inventory Tracking:
   • Go to the “Edit” menu and choose “Preferences.”
   • In the left sidebar, select “Items & Inventory.”
   • Click the “Company Preferences” tab.
   • Check the box that says “Inventory and purchase orders are active.”
   • Click “OK” to save your preferences.
4. Adjust Inventory: Now that inventory tracking is enabled, you can adjust inventory levels as you buy or sell items. Go to the “Vendors” or “Customers” menu, create or open a transaction, and enter the quantity of items you’re buying or selling.

Remember that enabling inventory tracking in QuickBooks affects how your financial reports, such as your balance sheet and profit and loss statement, are generated. It’s essential to keep accurate records of your inventory transactions to ensure your financial data is reliable.

Managing accounts payable and accounts receivable is crucial for the financial health of your small business. Our expert bookkeeper for small business offers specialized services to help you stay on top of your finances.

Additionally, if you have more complex inventory needs or require advanced features, consider consulting with a certified QuickBooks ProAdvisor or accountant to set up and manage your inventory effectively.