Guide to importing inventory from QuickBooks Desktop older than 2015

If you have QuickBooks Desktop file older than 2015 with inventory items and try to convert to QBO, read this article first. You will need 2015 or newer version to import inventory properly. They offer you the latest trial version. Click here for trial links. This is for US version only.
Note: Even with this latest version of QBD, you may experience some issues with inventory in QBO. Also, you may want to a 100% physical inventory, and adjust current qty to match in desktop before exporting to QBO. There is no value adjustment in QBO.

See also QuickBooks Help article.
 

FREE Trial
USA
CANADA

XERO - Alternative to QuickBooks

SAGE 50 Accounting

Limited Time Offer—Save Up To 37% On Sage 50 Accounting Software!

 




How to track donated inventory stock items by your business in QuickBooks

These are the specific steps you can follow in QuickBooks Online (available in plus plan only) if you are donating or giving away tracked quantity on hand inventory items.

Create ZERO Value Sales Receipt for Inventory Items:
1. From the Home Page screen > click Create (+) Sign (top middle bar) > Customers > Sales Receipt and create a Sales Receipt for the inventory item.
2. Choose a customer (name of donating company). Add new if needed.
3. Select Item Donation as your Payment Method. Add new if needed. Optional.
4. For “Deposit to” field, select Add new and create bank category type account. Name it clearing account. (This will create just a zero dollar transaction. You would not have any actual banking transactions in this bank register).

Screenshot 2016-07-17 16.03.31

 

5. In the Product/Service column, click the drop-down arrow to select the product/service you are donating.
6. Change the Rate of the selected product/service to zero so that the total of the sales receipt is zero.
7. Click Save.

Screenshot 2016-07-17 16.01.32

 

8. Click “More” at the bottom. Select Transaction Journal report. This will give you the original cost of the inventory items you are donating. Print as PDF or select export to excel. Do the same for the Sales Receipt.

Screenshot 2016-07-17 16.01.58

Screenshot 2016-07-17 16.02.07

 

Next, to account for the original cost of the product/service(s) selected, create a Journal Entry to move the cost out of the Cost of Goods Sold account and into the appropriate expense account (for example, Charitable Donations Expense).

To record this:
1. Click Create (+) sign > Other > Journal Entry.
2. In the Account section, choose the expense account used to track charitable contributions (for example, Charitable Donations Expense).

Screenshot 2016-07-17 16.03.09

 

3. Enter the cost of the product/service in the Debit field.
4. On the next line, click the drop-down arrow and select the Cost of Goods Sold (COGS) account for the donation.
5. The cost of the product/service entered in the field above will populate the Credit field.
6. Click Save.
7. Optional. Attachments (bottom left) for the record. Attach Transaction Journal (that gives you how you got the cost of the donated items) and Sales Receipt.

Screenshot 2016-07-17 16.00.01

Screenshot 2016-07-17 15.59.39
 

Our YouTube Tutorial Video: How to track donated inventory stock items by your business in QuickBooks

 

Handy reference to inventory item fields

Here is a handy reference on how to fill out fields in an inventory item screen you are creating.

You might not see some of these fields in your inventory item screen depending on your choices in Company Gear icon (upper right corner). You will need to enable Quantity on Hand (QOH) inventory tracking in Company Settings.

From the home page screen:
- Company Gear (upper right corner)
- Settings
- Company Settings
- Sales
- Products and Services
 
Show Product/Service column on sales formsAdds a Product/Service column on sales forms so you can choose from a list of products and services to include.
Track quantity and price/rateAdds Quantity and Rate fields to sales forms so you can track this information for products and services.
Track quantity on hand Lets you track available stock for each product you sell and its related inventory costs.

Click on the screenshots below to enlarge them
inventory tracking settings

Inventory item screen fields

FieldsReference Guide
NameEnter the name of the product item you are selling or Stock Keeping Unit (SKU). SKU could be manufacturer's part name or your own unique product code.
SKUManufacturer's part number or your own unique product code.
Note: You cannot select SKU on sales forms at this time. However, you can search it on Products and Services page.
Upload PhotoRecommended dimensions are 120 x 120 pixels.
Is sub-product/serviceIf the product is a sub-item, select it from the list under parent product name. Do not use parent product name. In our example, "Tools" is the parent product name and "Pipe Wrench" is the sub product item.
Track Quantity on Hand (for inventory items)
I track quantity on hand for this product. This enables inventory cost accounting.
When you select this checkbox, "Initial Quantity On Hand" and "As Of Date" fields will be displayed.
Initial Quantity On HandEnter a zero or actual quantity on hand. Bear in mind!! These two factors must be taken into account when computing actual quantity on hand: 1) all vendor purchased inventory items are recorded in QuickBooks (no unentered vendor bills left); 2) all sales invoices and sales receipts are shipped out (no outstanding shipments left).
Make sure actual quantity you are entering is 100% accurate. QBO is not that friendly when it comes to making inventory adjustments later.

As Of DateEnter "as of date".
Inventory Asset Account
Use default "Inventory Asset" account. It is best not to change it.
Sales Information
Description on sales forms
This is what the customer/client see on all sales forms (invoices and sales receipts).
Purchasing Information
Description on purchase forms
This is what the vendor sees on purchase orders.
Price/RateEnter the price you will sell it for. You can also change this price when creating a sales form.
CostEnter actual cost if you have "initial quantity on hand". Do not create sales form if you have zero Quantity on Hand.
Income account
(Sales of Product Income)
Default is "Sales of Product Income" account. It is okay to select other product income account.
Expense account
(Cost of Goods Sold)
Default is "Cost of Goods Sold" account. It is better not to change it.
Is taxableSelect "Is taxable" checkbox if the product item you are selling is taxable.

inventory fields

 

YouTube Tutorial Video:

Why are inventory purchases showing up as COGS instead of Inventory Asset?

I entered several POs yesterday, entered bills and paid the bills. All of these items are now showing up in COGS on my Income Statement rather than as Inventory Asset in my Balance Sheet. I have not sold them to any customers. What did I do wrong?

Answer:

It may be due to several company settings.

Follow the following step-by-step instructions:

#1 Products and Services settings ON > Company Gear (upper right corner) > Settings > Company Settings > Sales > Products and Services > All three selections should be ON

See attached photo 1.

#2 Bills and Expenses Item settings On > Company Gear (upper right corner) > Settings > Company Settings > Expenses > Bills and Expenses > All three items related settings should be ON

See attached photo 2.

#3 Track quantity on hand checkbox > Company Gear (upper right corner) > Lists > Products and Services > New > Product or Service Information form > Checkbox (I track quantity on hand for this product. This enables inventory cost accounting)
See attached photo 3.

#4 Item details section to enter inventory purchases > Create + sign > Vendors > Bill (or Expense or Check) > Select Item details (not Account details section) > Select Product/Service column to enter inventory purchases

See attached photo 4.

#5 Quantity available to create Invoice or Sales Receipt > Company Gear (upper right corner) > Lists > Products and Services > Quantity column should show quantity available to sell (no negative quantity, it will create problems down the road)

See attached photo 5.

 

1 products services settings ON
1 products services settings ON
2 bills expenses item settings ON
2 bills expenses item settings ON
3 track quantity on hand checkbox
3 track quantity on hand checkbox
4 Item details section
4 Item details section
5 quantity available on products and services list
5 quantity available on products and services list