Inventory vs Non-Inventory Items

[adminxpress]

Hello!

I have a client that has an online business with StoreFront 5.0 with Accounting Plus. He would like to set up his inventory in order to keep track of his profits and losses, make sales trends, etc. How would I set up his inventory when most of his business is Drop Shipped? I created an Excel spreadsheet to transfer to QB, I want to make sure that the way I set up the spreadsheet is tranferred to QB on the correct fields. Would I need to change the columns fields in his current database to make it work with QB? I'm also able to download the invoices from his Storefront program, but it records the inventory as services, does that sound right? How do you deal with Drop Shipped items and QB?

Is anyone here familiar with StoreFront 5.0 with Accounting Plus?

Your help, ideas and suggestions will be greatly appreciated. Thank you in advance!

Ingrid

[RCollier]

Ingrid,

If your client has no actual inventory, there is no need to set up an inventory in QB just to track COGS and sales trends. This is really just a basic sales transaction.

If you were recording the transaction by hand, it would go something like this: When a sale is made, debit cash and credit the sale income account. If he pays the wholesaler a percentage of the sale price, debit COGS and credit cash. (Basically, deduct whatever he pays for the item(s) sold and put that to cost of goods.)

One thing that will need to be kept in mind is...are his books set up on a cash basis or an accural basis? If he is on a cash basis and he pays for the items sold at a later time, this can affect his tracking in general ledger. On a cash basis, expenses are recorded when they are paid (not when they are incurred). If he sells an item and doesn't have to pay for it for another 30 days, his COGS entry may end up in the following month's books.