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  #1  
Old 01-02-2018, 01:34 PM
Hammerhead Hammerhead is offline
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QBO Basic and Inventory

I'm on QBO basic because I think $50/month for tracking inventory is highway robbery, especially for the dozen SKUs we carry.

However, I do need to purchase and maintain a certain amount of merchandise for sale, not only of our own product, but accessories that go along with certain sales.

Is it safe to assume that if I make a purchase of inventory, that the charge is filed under 'cost of goods' and when I sell them, the transaction is booked as sales, anything left over is profits, correct?

In other words, do I need to do anything special here, or is using the COGS and Sales accounts good enough to get me by?
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  #2  
Old 01-03-2018, 05:50 AM
Rustler Rustler is offline
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It is a judgement call, if you sell all or most of the items by the end of year, you can get away with doing that way, but assuming your business grows, you really should do the right way.

I agree on the cost of QBO plus

To do inventory without using inventory items, you must use periodic inventory which is a manual operation.

see my comparison at the end of this for desktop vs qbo, and cost is listed there too

There are two ways to do periodic inventory, choose one and stick with it, you can not mix and match

1. (my preference) Create an asset account called purchases and post all purchases of item for resale to that account. Periodically, weekly, monthly, etc value the inventory on hand, subtract that value from the amount shown in the purchases account and do a journal entry for the answer to the subtraction
debit COGS for that value
credit purchases for that value

OR

2. Post all purchases to COGS. Periodically, but at least at the end of the year, you value the inventory on hand and do a journal entry.
debit the asset purchases account for that value
credit COGS for that value

Print the P&L
then reverse the journal entry
debit COGS for that same value
credit the asset purchases account for that value

This last journal entry, moves the value of what was on hand at the end of year back to COGS so the cost will be counted against the new year sales.

a non partisan comparison of QBO vs QB desktop
http://onsale-apparel.com/Rustler/qbo-or-qbdt
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  #3  
Old 01-03-2018, 08:30 AM
Hammerhead Hammerhead is offline
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Quote:
Originally Posted by Rustler View Post
I agree on the cost of QBO plus...
Yeah, don't get me started. ;-)

The issue for me is that I need to use QBO because I'm a one-man operation and have to integrate with my e-commerce solution (which supports both retail and B2B dealer sales), and eventually, my CRM, along with a need to easily track expenses on the road.

To make matters more complicated, the inventory is consignment. I operate as a 'satellite office' for the parent outfit, so the merchandise is not mine. I don't buy, then sell. I sell, then pay. All sales are a pass-through on a dollar-for-dollar basis. IOW, I sell $1000 of stuff to a customer and invoice, the payment comes from the customer to close the invoice, and $1000 is sent to the parent company, booked on my end as [Expense] 'cost of sales'.

What if I did something similar where I just aggregate all PP purchases using a 'customer' account called 'PayPal' and once per month make a manual entry for all the line items sold, the total value, make manual entries for PP fees, and shipping costs (which is done anyway because I use my debit card at the post office) and then when I transfer in the money to my business banking account, it should match up? Would that work?
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  #4  
Old 01-04-2018, 05:44 AM
Rustler Rustler is offline
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Items on consignment, assuming you are selling them, are NOT inventory.

I operate as a 'satellite office' for the parent outfit, so the merchandise is not
mine. I don't buy, then sell. I sell, then pay. All sales are a pass-through on a dollar-for-dollar basis. IOW, I sell $1000 of stuff to a customer and invoice, the payment comes from the customer to close the invoice, and $1000 is sent to the parent company, booked on my end as [Expense] 'cost of sales'.

Then there is no inventory to deal with, basically you are drop shipping. ordering what you sell and having someone else fullfull the order.

But if a customer orders 1K, and you send 1K to the parent, how do you make any money?
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  #5  
Old 01-04-2018, 08:15 AM
Hammerhead Hammerhead is offline
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Quote:
Originally Posted by Rustler View Post
Items on consignment, assuming you are selling them, are NOT inventory... But if a customer orders 1K, and you send 1K to the parent, how do you make any money?
Exactly. But QB does require an item, and we do need to monitor sales by SKU for reporting to determine dealer volume agreements, to track replenishment requirements, and also for marketing purposes to know what's trending, and which way.

LOL. Yeah, that does seem a bit odd. The parent company operates from the EU. I send them the entire invoice amount, they send me back a monthly retainer plus commissions. I'm pretty sure this is for EU tax purposes. Whatever... it's a livin', I s'pose.
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