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QBO: How to Create and Track Products and Services

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What products and services does your company sell? Do you have enough to fulfill existing and future orders? QuickBooks Online (QBO) can help you track products and services.

Part 1 – Creating Products and Services

Most small businesses maintain a changing inventory of multiple products. Even if you sell one-of-a-kind goods, you need to know what you’ve sold and what’s available. If your company sells services, you also have to keep track of what you’re able to offer customers.

QuickBooks Online can meet these needs. It allows you to create detailed records for both products and services. If you carry inventory, it can make sure 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, etc., without having to leave the form you’re working on.

Creating your records initially can take some time. Your products and services require regular monitoring and maintenance. If you’re conscientious about these tasks, you’re not likely to run short on inventory or have too much money tied up in products that aren’t selling fast enough.

Preparing QuickBooks Online

Before you begin creating records and tracking inventory, you need to ensure you QBO 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.

Ensure 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 when you’re done. One option allows you to turn on price rules. This is still classified as a beta feature, but it’s live on the site. It’s also quite complicated to set up and can create confusion for your customers and revenue loss for you if it’s not done correctly. Let us help if you want to use this tool.

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 your 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.

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. 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 Goods Sold, but you can ask us to be sure)

Part 2 – Tracking Products and Services

First, hover your mouse over Sales on your left vertical pane on the main page; then click Products and services. This screen displays real-time information about your items’ pricing and inventory levels, as well as their type and tax status. At the top of the page, you’ll see big, colorful buttons that provide a total of the number of items that are low on stock or out of stock. When you click on one, a list of those products appears.

The Products and Services page displays inventory levels and warns you when your stock is low/at zero. 

Each row on this screen contains details about the item listed there, like Description, Sales Price and Cost, and Qty On Hand. If you look down at the end of the row, you’ll see options for several types of Actions: Edit, Make inactive, Run report, and Duplicate. Click the gear icon above the table to modify the columns in the table.

The More menu at the top of the screen contains more options: Manage categories, Run reports, and Price rules. If you want to know what actions you can take on multiple items simultaneously, check the box in front of each and click the Batch actions menu, over to the right (Adjust quantity, Reorder, etc.).

Warning: Be very careful using the Adjust quantity option. There are legitimate reasons for employing it, but you need to make very sure that you understand how this will affect other areas of your accounting. Please ask us if you’re unsure.

Using Products and Services in Transactions

Once you start using product and service records in transactions, you’ll see why we suggested that you create those early on and make them as comprehensives as possible. While you can add products and services in the process of creating an invoice, for example, it’s much easier if you have them ready to go.

Let’s look at a sales receipt to see how this works. Click +New in the upper right corner and select Sales receipt. Select a Customer in the first field and verify that the related fields on the form were filled out correctly. Check and make any changes necessary in the Sales receipt date, Payment method, and Deposit to fields.

Once you’ve built up a list of products and services, they’ll be available when you create transactions.

Enter the Service Date, and then click the down arrow in the field under Product/Service. The top of the list has an entry labeled +Add new. Click it if you need to add a product or service on the fly, or just select the existing one that you want. QBO will fill in the Rate, Amount, and Tax (status). You only have to enter the Qty (quantity) that you’re selling.

If you have more items or services to add, you can do so on the next line(s). When you’re done, check the numbers in the lower right and save the transaction. QBO will adjust your inventory to account for any items you just sold. You can see this change by going back to the Products and Services screen, or you can run reports, including:

  • Sales by Product/Service
  • Product/Service List
  • Inventory Valuation Detail
  • Physical Inventory Worksheet

Supply Chain Woes?

It seems that the serious supply chain problems we were experiencing in previous months have eased up some, but you may still be having trouble stocking some items. We hope this isn’t affecting you too much.

QuickBooks Online can help ensure that you know ahead of time when you must reorder. Its inventory-tracking capabilities can also alert you to items that aren’t selling well, so you don’t get overstocked on anything. The ability to pull up product and service records when you’re creating transactions saves time and keeps your inventory levels accurate. Please let us know if you need assistance with this element of your accounting – or any of QuickBooks Online’s other tools. We are always here to help you with all your QuickBooks needs!

Small Business Solutions LLC – Office: 256-337-5200 – Email: info@biz-bob.com