 QuickBooks Online 2022, set up inventory items. Get ready because it's go time with QuickBooks Online 2022. Here we are in our GitGridGuitars practice file that we set up with a 30 day free trial holding down control, scrolling up just a bit to get to that one, two, five percent we're currently in the home page, otherwise known as the Get Things Done page. At least within the business view that we are currently in, if you wanted to switch to the accounting view, you can do by going to the cog dropdown up top, switching to the accounting view. We're gonna stay in the business view however, and we'll probably toggle back and forth to our other file which is going to be the sample company, just to take a look at where the relevant items are in the accounting view. Going back on over, we're now gonna be thinking about the inventory items. Last time we took a look at our inventory methods, we're entering our beginning balances into the system. These are gonna be our beginning balances. We wanna set up these items before we start entering new transactions into the system. It's all about at this point in time getting the process set up so that we can then lay on top of that the transactions for the current time period which will include the items and the plus button, the invoices, the expenses, the bills and so on and so forth to do that properly. We first need our chart of accounts set up and then we need to have our items set up to properly populate our invoices and sales receipts. We also need our beginning balances if there are any beginning balances from the prior accounting system or any starting numbers that we need to set up that we currently have. And this is gonna be our inventory items. We're gonna start with the ones that are a little bit more complex. This is probably the most complex one if we're using a perpetual inventory system because we have the amount here but I can't just enter the amount into the system. In other words, you might say to enter this amount, you might say, well, that's gonna be easy to do. I'll just go on over to my accounting bookkeeping over here possibly, which is where the chart of accounts is at under the business view. Close up the hamburger, I'll find that inventory account and then I'll just enter say a beginning balance into it possibly editing it at this point seeing if they give me the option for a beginning balance, if they don't, then I'll just enter a journal entry for that account by going into the register here and just entering a transaction for it. However, you don't really want to do that or I can enter, you know, go to the form of the journal entry, the plus button. I can also enter a journal entry this way and go into the form, but you don't really wanna do that because if you have a perpetual inventory system, we also need to track the items as well. So let's get back to the home get things done page. And so we gotta enter the items that are gonna support that one here. So that's gonna be a little bit more complex. We could find those items if we go back on over. Now we need to enter the items for two reasons now. We entered the service items, not because we had any beginning balances, but because it's gonna be used to populate the invoices and the sales receipts. Now we want to enter the inventory items for two reasons because they also will be used to populate the invoices and the sales receipts. And also because we want the beginning balance to be put in place, these will also be used on the purchasing side of things when we purchase inventory for the expense forms and the bill forms and the purchase order if we're using those forms as well. So we could find the items by going to the get paid tab down here. If you were in the other view, the accounting view, it would be in the sales tab and then in the products over here in the business view, it's in the get things done. I mean, it's in the get paid tab and then it's down in the products area. We're gonna close the hamburger up top. Now you could enter this one at a time like we saw with the service items hitting a new button up top and this time going to an inventory item, the most complex item and just taking a look at the fields that would be populated. You got the name, the SKU number now being something that could be useful. You can put an image of it which actually could be useful now if you have a lot of inventory that could actually help in the processing for different people to know what you're actually talking about category. If you have multiple components of inventory it could be useful to give subcategories the quantity on hand. Now, this is something that you usually only wanna use when you first set up the accounts which we can use at this point in time. You don't typically want to do this after you first done that because then it's gonna distort your accounting because any inventory after the first point in time you most likely purchased the inventory and then the date that you put it on hand the reorder point when it gets down to a certain level it'll give you a reminder to reorder the inventory asset account. So this is the account that's gonna be used when we purchase the inventory on the balance sheet the description that's gonna be the sales description that's gonna go on the invoice and the sales receipt when we use this item to make a sale the price and then the income account sale of product income and then the purchasing information that's what's gonna show up on the purchase order expense form and or bill form when you purchase something with this item the cost that's what we pay for it as opposed to what we sell it for cost a good sold account is the account that's gonna be hit when we sell the item with an invoice or sales receipt form and the preferred vendor would be the vendor that we prefer to purchase this inventory item from. So there's a lot more information here in case you then the service items in case you didn't wrote that wasn't apparent. So then we're gonna go back on over and say let's pretend that we have all these service items or inventory items that we wanna put in place imagining their guitars now. So we're gonna say we have the item the ELP it's gonna be an Epiphone Les Paul on the sales description purchase description the same thing and then we have an Epiphone Standard Pro Epiphone Riviera Epiphone semi hollow body Gibson USA and a diamond head ukulele. I'm not a guitar expert or anything I just I have a couple guitars but I'm certainly not a connoisseur of guitars. So if I get any of this stuff wrong I apologize it's just a practice problem and then we're gonna do our diagnostics on the guitar which is kind of weird too but I in any case it'll work. So then we got the cost here the sales price caused a good sold that's the account we sell it for on the expense side the income account is gonna be sales which I might have to adjust and then the asset account is here sales tax will be applicable. So note that this is the information that you might get from like another accounting system or we might set up our own kind of items in a worksheet which would be easier to do when you're first setting them up then trying to set them up one at a time just in your mind going through line by line it would be nice to have them laid out like this either from another accounting system or just to think through it when you're thinking about multiple inventory items and then import them into the system which is what we are doing now. Notice that the cost here is what we purchased them for so if I was to figure out how does this tie into this number on the balance sheet we would take this cost times the quantity that we have on hand which I did a little worksheet on here will give us and if we add that up it gives us that two, eight, nine, six. So as we enter these inventory items on hand and assign the cost to them and tell the system how many units we have the system inventory will record the transaction to the asset account of inventory at that cost the other side will be posted to some kind of equity account profit possibly opening balance equity. Okay, so let's do that. So let's do it then enough talk I've had enough of your talk so then we're gonna go inside here and we're gonna go let's hit the dropdown and say import, import and then same kind of instructions we saw with the service items now I'm gonna pick up I'm gonna download their worksheet again cause I wanna use their headers and make the import process as easy as possible that will be as easy as possible to use their data input fields instead of guessing what they are so I'm gonna take their worksheet and see if I can copy and paste my stuff into their worksheet so let's do it I'm gonna enable the editing so I can edit it I wanna enable my editing and then I'm gonna scroll up a bit and I'm just gonna go to the right I don't need their little thing down here I don't need that do not import this file as is yeah whatever, delete okay so we need the product and service I need that tab so I'm just gonna try to copy the tabs I need here I don't want the stuff in it but I need that tab I need the sales description I want that the SKU I don't have one I don't have unit numbers so I'm gonna delete that don't need it don't need it the type it's gonna be an inventory type so I'll just say inventory and I'll copy that all the way down that's the one we want and then sales price I need that but I'm not gonna put these sales price income account that's I'll have to look that up but we do want one the purchase description I'll have to input that the purchase price cost I want that the expense account we're gonna need that cost on hand or quantity on hand we're going to need that so I'm gonna say okay and the reorder point I don't think I chose the reorder point I'm just gonna delete it I don't have a reorder point don't need it inventory account we're gonna need that and the quantity as of date we need that all right now let's just copy and paste our stuff into the proper column so I've got on the right hand side the item name so I'm gonna say item name I'm gonna copy that and go back on over here and we're gonna put that in the product service name this is gonna be the short hand kind of name that'll be easier for us to pull up and then it'll give us the description which is just gonna be these the actual name of the guitar that we have so these are the guitars that we sell we sell guitars by the way in our practice problem and then inventory and then the other side the purchase description is the same where's my purchase description over here there it is purchase description populated and then if I go back on over and say okay then I need my cost and the sales price of the cost what we purchased them for obviously less than the sales price so we're gonna say we purchase these things they're going up in price right now it's an inflationary time period but this is where we're at purchase and then the sales price the sales price is going to be here copy in the sales price where does that go that goes over here sales price income account let's just look this up in our system and see what the income account is i'm going to duplicate this tab by right clicking and duplicating it and see if there's an appropriate income account for us to put our inventory items in to the inventory items into closing up the this thing up top and we're going to go into we're going to go into the get paid area in the get paid section and then let's go up into the products and services and now that's not where i want to go i just like saying get paid i'm gonna open up get things done page and then go down into the bookkeeping area for the chart of accounts close up the hamburger and then we're scrolling down so let's look at our income accounts down here say what kind of income accounts you given me quick books what kind of income accounts we got billable refunds sales sales of product income well that's very descriptive let's use that one sales of product income is that the one that they use by default by the way if i was just to open up a new item of inventory and scroll down yes sales of product income let's use that one that's the one that's the one that they like so i'm gonna paste that one right here pasted and then copy that down uh... what in the world can i paste it just with the text only paste special text they've got some old version of excel here's the problem uh... why why is it doing that what is it what is it do that that's annoying is it too sale well whatever i don't care that it does that that's okay it's going to be like that let me copy it again let's go back in here and say inventory sale of product income i'm gonna put that over here in this old version of excel is going to do something weird to it but i don't care i don't care that's okay it's not going to mess me up alright let's go back on over and so then the cost of goods sold that again we could look that up i think that would be straightforward on the cost to get sold side of things so that would be a default here it is cost to get sold account so that looks exactly worded the same so where's that account expense account is the cost of goods sold let's paste that special with the text only copy that down copy that roger out roger that and then the sales and in the inventory we got the sales line inventory line quantity on hand so this is how many units we currently have quantity on hand and then the inventory asset account is just going to be inventory but let's just double check that in my data input field that default line should come up here it's just going to inventory assets so that's we need to call it inventory assets account that's the one they want that's what they'll get paste it inventory asset account and then the as of date we want to make sure it's before the time period that we're working in just to make sure that they don't put anything into the current income statement so twelve thirty one twelve thirty one uh... two two i'm going to say and copy that down and does that mess up their thing to put it in that excel format if i go to import so that's that date formatting can mess them up sometimes so so but i might save it as a c s v file but i think it will give it a shot we'll see what it is so there we have it there's all the stuff now we could save it as a c s v file but i'm just going to save it as this file because they say they can handle an excel file so let's go ahead and just save this on our desktop i'm just going to put it right on the top of my desk so i know where it's at my desktop as it's called and we're going to put this into the quick books and we'll put it into the new company section new company and i'm going to call this inventory items save it i don't know what it's talking about with that but i'm going to close that out maybe i should read that probably would be a good idea but no i don't need to read it i'm not reading nothing here we go so now we're going to then import this so we're back in here if i close out the x we're in the new drop down and import and now we're just going to browse to find the file that i put right on the top of my desk right on my desktop in the quick books online and we're in the new company section new company file and there it is inventory items and let's go ahead and say next and so now it's mapping this is what they call mapping the headers to our headers which should be exact because we use their headers so product item that looks perfect sku we don't have one type is to type sales description to sales for description notice if they're wrong you can hit the drop down and and find you know try to line up the descriptions but we lined them up perfect by using the exact same names purchase purchase so looks good looks good nothing here on the reorder point inventory asset uh... quantity as of date so those look good let's hit next and say this is this we're gonna sell them and we're gonna buy them we're gonna track them meaning they're going to be tracked in a perpetual inventory method this is the name that looks good the s k u don't have one type it's going to be an inventory type as opposed to a sales type we could make these a little longer if we want to sales description there's the guitars that we're going to be purchasing and selling in case you're in the market come on down actually what i don't actually have them it's just a practice problem it's just a practice problem i have like a couple guitars but they're for personal use purchase description and then purchase costs expense is going to be the cost of goods sold quantity on hand reorder point inventory and they won't give me this last one because i made the sale the sales too small uh... maybe i got a scroll down a bit scroll down inventory asset account okay i think i think it's good i think everything is good so let's go ahead and import it let's do it let's do it import six of six products in service successfully imported success let's check it out just a double check that the success is actual success i don't really trust quick books all the time so let's close this back out and say let's see what they did then scrolling down here's our items so it looks like they imported properly here's the units that we have on hand if i hit the edit button now here's the detail that has been put in in this format so you can see the same kind of data input fields have been populated that we put in you know in the excel worksheet now we will add inventory items like more like this way or as we go in the future so you can see that too but notice it also now we have something that should have populated on the financial statements as well so if i go back to the second tab list let's open a financial statement and see what they did on that site what do they do on the financials i like to start to get things done page and then move down to the business overview that's where the reports are at and the reports if you're in the accounting view the reports are located in the reports tab down here and and then the reports just a slight difference going back on over back on over to the business view we're going to open up the balance sheet let's do a range change up top from let's make it from 010121 to 123121 because we entered it in as of the end of uh... december closing up the burger so there we have it and they put the inventory at four hundred that's not right four hundreds too small so i see what happened here let's i'm going to change the date to 123122 and then run it and then i get the right number so it's a date issue and it's always a it's always a date issue most likely so what i did is i went over here and when i copied it down it copied a uh... instead of copying it i basically made a running balance i want to copy i should have copied this and had it all at 123121 so i was sloppy in that so now i'm gonna have to go back on over here and fix it so i'm gonna so i could fix it in the system by just drilling down so i'm gonna drill down on the data here and i'm gonna fix the dates notice when i drill down on this data it's not going to take me back to the same data input form it's going to take me to a different uh... you know inventory adjustment form so everything that's not 1231 i'm just gonna adjust to 1231 so i'm gonna drill down on this form and i'm gonna say let's bring it back a day for five or save it close it and do it again so this one adjusting that one going back into that one this one this is what you this is what you get for being too fast on stuff you're too fast you gotta be accurate and fast accurate then fast that's the way it goes so we're otherwise you just running circles which isn't very helpful so then we're going to go back into this one do this one again adjusted back on to the thirty-first run it run it one more time you know base malls and back to the thirty-first okay now it's good now if i run if i go back to my report and i i just the drains change again from all one all one two one all one all one two one two twelve thirty one two one and run it now it looks good on that one and that's our beginning balance number that we had here right two eight nine six year dang right it is and then down here it put the other side into opening balance equity which is kind of not the most proper account but you can see they just dumped it into the other side into equity if i go into that we can see the same transactions here so that looks good and if i go back then that looks good because that means that every if i do that to every other account they'll dump the other side somewhere into equity so equity as a total will be correct once i do this for all the other accounts which we'll see as we go so that looks good and then there's going to be a sub ledger for inventory which we can run a different report for this right click up top and duplicate the tab and see that it's tracking our inventory unit items properly by going to the reports which if i go back to the get things done page i then go down to uh... to the reports which is in the business view again reports and i want to look at the inventory reports i'm gonna say inventory valuation summary let's go into the inventory valuation summary report and so now i've got the quantity here's the here's the items that we have the s k u the quantity that we have on hand the value and then the the average item so here's the total the two eight nine six which ties out to what we have here on our report the two eight nine six we have that added detail and if we were to create one of our reports up top to to now interfinancial transactions so that we can get paid we can hit the plus button up top an invoice or form or sales receipt we can enter these items and we could have our inventory items on down below right here in our drop down and they will populate for us making the data input super simple and it will actually calculate this thing which is a fairly complex calculated calculation we're gonna add sales tax at a later point so we'll have to deal with the sales tax later that's something you need to keep in mind when you add items to uh... we're going to do sales tax kind of on its own on its own thing because it's its own little complication but it's a fairly complex transaction to enter an invoice of inventory because it's tracking the inventory items and possibly dealing with sales tax but if you set it up properly just like when you scan something yourself at a grocery store it's basically easy to do because they set up the the the back end correctly so let's close this back out and say we're gonna we do you want to do you want to leave without saving i do i'm just gonna leave it without saving it and i could also hit the plus button and when we do up an expense or when we purchase something uh... we can also be purchasing items on the expense side of things or purchase order and we want to use the items then on down below and we can purchase the items which will then pull in the proper cost amount as opposed to the sales price because the items are driving both the cost and the sales price side of things super cool that to set that up super easy one set up not so easy to set up but once you know how to do it you're a lot more valuable to the accounting system