QuickBooks Pro 2022: Tracking and Calculating Inventory

Name: QuickBooks Pro 2022: Tracking and Calculating Inventory
Author: Takeisha Strong

Learn the different inventory types, how to set up inventory accounts, and how to track and calculate inventory values

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Course: On-Demand

Hello, my name is Takisha Strong. In these lessons, we will learn to set up our inventory accounts, track our inventory items, and calculate the inventory value and cost of goods sold. We will use our sample product-based company, Rock Castle Construction, for the lessons. Inventory parts are products that you may sell to your customer. They can be purchased from your vendor and sold at a retail markup, or they may be individual parts used to create a finished good or product that you ultimately sell to your customer. Inventory items and the related accounts used in accounting software are created to manage or track the inventory itself, and to track the costs and related profit associated with itself. Let's get started. We'll walk through the GL accounts needed and how to set them up. Press the chart of accounts tile in the company section of your homepage. You'll notice that we already have an inventory asset account. For these lessons, let's assume Rock Castle Construction is testing out a new line of installation books to create passive income for the company. The company would prefer to set up new inventory accounts to track all of that inventory separate from its normal day-to-day operations. In order to track inventory parts, you'll need to set up a current asset for inventory. Sub-accounts can be created if you choose if there are different types of inventory that the company wants to track separately, and we'll also need an income account to track when the inventory items are sold and a cost of good sold account to reflect the costs associated with that income. Let's select Control + N to create a new account. We'll select other account types and other current asset, and press Continue. Confirm the account type at the top is other current asset. Let's call this section Wholesale Books. Press Save & New. We currently have two lines of installation books that we're gonna start with. We'll call the first flooring installation. We'll make this a sub-account of our Wholesale Books Inventory, Save & New, and we'll call the next Drywall Installation. This will also be a sub-account of Wholesale Books Press Save & Close. You'll see now in the other current asset portion of our chart of accounts, we have our original inventory asset that's tracking our day-to-day operational inventory, and we now have this Wholesale Books section with Drywall Installation and Flooring Installation as sub-accounts. Next, let's create the accounts needed to track activity on the profit and loss statement. We'll scroll down to the income and cost of goods sold portion of our chart of accounts. You'll see we currently have cost of goods sold items related to day-to-day operations, such as job expenses, general cost of goods sold, and other additional items, such as freight and delivery. Keep in mind Rock Castle Construction would like to track this income and the cost separately from our day-to-day operations. To do so, the first thing we'll do is create a new income account. Press Control + N, select income, continue, and we'll call this Book Sales. Press Save & Close. For the cost associated, meaning the wholesale cost of the books that we sell, instead of selecting a cost of goods sold chart of accounts type, we're gonna make this a subsection of our income for book sales. Press Control + N. We'll select income again, continue, and we'll call this Cost of Books Sold. We'll make this a sub-account of our new income, book sales, and press Save & Close. In the next lesson, we will learn how to track our inventory items within QuickBooks. Thanks for watching.

Intermediate Provider : Takeisha Strong 3 Lessons · 22m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

Some companies purchase products wholesale to sell or bundle goods to their customer base at a retail rate. Other companies may use several raw materials to build a new product for their customer base. The accounting software can inform management how much needs to be ordered and when and how much to hold in storage. Developing the proper inventory reports also equips management to assess the profit margins based on inventory costs, compared to the finished item sold.

All products and services are categorized as items within QuickBooks Pro 2022. The Pro subscription level of the software allows users to add, track, and adjust the quantity of inventory on hand in a company’s file. In Tracking and Calculating Inventory, users will learn the different inventory types and how to customize their chart of accounts to manage and track inventory items. After completing this module, the user will understand how inventory transactions affect the Balance Sheet and Profit and Loss Statement, and which QuickBooks transactions affect the inventory’s quantity on hand.

What You'll Learn

Create inventory accounts and customize the chart of accounts to manage inventory items
Track inventory items and adjust the quantity of inventory on hand in a company's file
Identify the different inventory types within QuickBooks Pro 2022
Calculate inventory and cost of goods sold
Understand how inventory transactions affect the Balance Sheet and Profit and Loss Statement
Recognize which QuickBooks transactions affect inventory's quantity on hand

Key Takeaways

In QuickBooks Pro 2022, all products and services are categorized as items, and the Pro subscription level lets users add, track, and adjust inventory quantity on hand in a company's file.
Developing proper inventory reports equips management to assess profit margins based on inventory costs compared to the finished item sold.
The accounting software can inform management how much inventory needs to be ordered, when, and how much to hold in storage.
Inventory transactions affect both the Balance Sheet and the Profit and Loss Statement.
Customizing the chart of accounts is part of managing and tracking inventory items in QuickBooks Pro 2022.

Frequently Asked Questions

What will I learn in this QuickBooks Pro 2022 inventory module?

You will learn the different inventory types, how to create inventory accounts, how to customize your chart of accounts to manage and track inventory items, how to track inventory, and how QuickBooks inventory features work, including calculating inventory and cost of goods sold.

Who is this course for?

It suits users of companies that purchase products wholesale to sell or bundle goods at a retail rate, or that use raw materials to build new products, who want to use QuickBooks Pro 2022 to track and calculate inventory.

What topics do the lessons cover?

The lessons cover setting up inventory accounts, tracking inventory items, and calculating inventory and cost of goods sold.

What will I understand after completing this module?

After completing the module, you will understand how inventory transactions affect the Balance Sheet and Profit and Loss Statement, and which QuickBooks transactions affect the inventory's quantity on hand.

What skills does this course help build?

It helps build skills in inventory accounting, inventory management, inventory management systems, inventory monitoring, inventory planning, and using QuickBooks accounting software.