QuickBooks 2016: The Missing Manual

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 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. You’ll learn what the program does to track how much inventory you have (and what that inventory is worth) as you record all these transactions. Recording inventory sales is just like recording any other sales; QuickBooks handles the money transfers between accounts behind the scenes.

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 ...