QBO inventory is very basic —buy the item and sell the same item. So it is simple as 1-2-3.
- Create Products & Services as Inventory type item.
Key fields to remember:
a) Quantity of hand = “0”
b) Inventory asset account = Inventory Asset (always this default account)
c) Select “Income account” = Income type account
d) Select “Expense account” = Costs of Good Sold type account
- Buy inventory from the Vendors and enter your purchased Inventory items using the Vendor forms (Expense, Check, Bill)
a) Always use “Item details” tab. Never to use “Category details’ tab to record inventory purchases.
- Enter Invoice (or Sales Receipt) form to create a customer sales transaction. Sales transaction journal will do two things in general.
a) It will record income
b) It will also pull out inventory item from inventory asset account and post the inventory cost (FIFO) to Cost of Goods Sold account.
If just follow these simple steps, you should be in good shape!