Chapter 20. Managing Inventory
As you record inventory purchases and sales in QuickBooks, the program keeps track of your inventory, just as the point-of-service system at the grocery store does when a cashier scans items. This chapter begins by explaining how to turn on QuickBooks’ inventory features and set up inventory items in your company file so the program can work this magic.
Unless you practice just-in-time inventory management, you need inventory in your warehouse to fill customer orders. If you follow the lead of many companies, you start off by creating purchase orders for the inventory you buy, so you can verify that you receive what you’re supposed to. The next step in the inventory process is receiving the inventory and paying for it. Finally, all that work pays off when you sell products out of inventory to your customers. This chapter shows you how to create purchase orders, receive inventory, and pay for it. Recording inventory sales is just like recording any other sales. Behind the scenes, QuickBooks handles the extra money transfers between accounts. You’ll learn what the program does to track how much inventory you have (and what it’s worth) as you record all these transactions.
Good inventory management means more than just updating the number of items that QuickBooks thinks you have on hand. To keep the right number of items in stock, you also need to know how many you’ve sold and how many are on order. And to make decisions like how much to charge or which ...