The Magic and Mystery of Items
The first QuickBooks list you need to finish setting up is the Item list — the list of stuff you buy and sell. Before you start adding to your Item list, however, I need to tell you that QuickBooks isn’t very smart about its view of what you buy and sell. It thinks that anything you stick on a sales invoice or a purchase order is something you’re selling.
If you sell colorful coffee mugs, for example, you probably figure (and correctly so) that you need to add descriptions of each of these items to the Item list. However, if you add freight charges to an invoice, QuickBooks thinks that you’re adding another mug. And if you add sales tax to an invoice, well, guess what? QuickBooks again thinks that you’re adding another mug.
This wacky definition of items is confusing at first. But just remember one thing, and you’ll be okay: You aren’t the one who’s stupid: QuickBooks is. No, I’m not saying that QuickBooks is a bad program. It’s a wonderful accounting program and a great tool. What I’m saying is that QuickBooks is only a dumb computer program; it isn’t an artificial-intelligence program. It doesn’t pick up on the little subtleties of business — such as the fact that even though you charge customers for freight, you aren’t really in the shipping business.
Each entry on the invoice or purchase order — the mugs that you sell, the subtotal, the discount, the freight charges, and the sales tax — is an item. Yes, I know this setup is weird, but getting ...