neurontin normal dosage

Quickbooks

Understanding Items in QuickBooks

Items in QuickBooks can be confusing.  You may not know where to use them or why to use them, or even which item to use.  Most accounting programs don’t use items. The larger, more expensive programs are made up of several modules and you purchase only the modules you need.  

For example, you would purchase the general ledger module and then add on only the modules you needed, such as accounts receivable and accounts payable.  You would enter your data into these modules into batches and you would post these batches to the general ledger.  Quickbooks is a forms driven program and does not use modules, however the process is similar, it’s just that QuickBooks does the posting to the general ledger in the background.

When you enter a bill or an invoice and use the item tab, the items you are choosing have already been set up to post to a general ledger account number.  Some items are single sided items, which means they only post to one general ledger account and some items are two sided items, meaning they post to two general ledger accounts.  There is no need to post anything else to the general ledger account.

There are several different lists in QuickBooks, but this blog will cover the regular item list.  Which items do you need and why?

  • Service Item – Once you have setup an item as a service item it cannot be changed to another type of item.  Use this item for professional type of work or payment for professional service.  You will use an income account for this.  If you are going  to use this for both income and expense, mark the box that says “this item will be used in assemblies or is performed by a subcontractor or partner.”
  • Inventory Part – Use this item to setup your inventory item list.  For the expense account use your COS account and for income use one of  your income accounts.  You also need to enter your inventory account (balance sheet account), reorder point, and on hand amount.
  • Inventory Assembly – Use this for inventory items that have been assembled from other inventory items.  Your expense account is COS and use one of your income accounts for income.  In the Bill of Materials box fill in the inventory items that make up the Inventory Assembly.  You will also need to add your inventory account (balance sheet account), reorder point and on hand amount.
  • Non-inventory Part – You will use this item for products you purchase but are not going to keep track of as inventory such as office supplies.  It would be a single sided item in this case.  If you are going to charge your customer or use it in an assembly item then mark the box “This item is used in assemblies or purchased for a specific customer:job”.  You will then have to enter both the expense and income accounts.
  • Other Charge - Use for miscellaneous labor, material, part charges, delivery charges, set up fees, service fees, etc.  You can use this as either a single or double sided item.
  • Subtotal – Adding this to your forms will give you a total of the amounts above the subtotal row up to the previous subtotal row.
  • Group – Use this item to quickly enter several items at one time on your forms.  Give the group a name and in the box list the individual items and quantities to include in this group and save.
  • Discounts – Use this item to give your customer a discount on a product or service.  Do not use it for a prepayment.  You will use an income account for this item.
  • Payment – Use this to record payment at the time of the sale.  When entered on the invoice it will reduce the amount due.  There is no account to set up for this item.
  • Sales Tax Item – Use this item if you only pay one tax rate to one taxing authority.
  • Sales Tax Group – Use this item if you pay different rates to different taxing authorities for the same sale.  The customer will only see the total tax due.

Understanding how your items work in QuickBooks is critical in getting the correct reports from your data.  If you do not have the right account number associated with them, your reports will not be correct.  I hope I have helped you to understand items a little better, if not please don’t hesitate to contact me.

Posted in Quickbooks. Bookmark the permalink.

About Jo Ellen Peters

Jo Ellen Peters is the owner of Top Notch Bookkeeping and an Advanced Certified QuickBooks ProAdvisor. She has over 20 years experience in bookkeeping and payroll, with 14 years at a CPA firm working for clients in a variety of industries. She attended college at Marshall University in Huntington, WV, is a member of the American Institute of Professional Bookkeepers and is a Certified Quickbooks Consultant for The Sleeter Group.

48 Responses to Understanding Items in QuickBooks

  1. I like the helpful info you provide to your articles. I will bookmark your weblog and test once more here regularly. I am quite certain I will be informed many new stuff proper right here! Good luck for the following!

  2. Catherine Ayotte says:

    Is it possible to not use the items in QuickBooks? It doesn’t work for my husband’s type of business. The previous version of QuickBooks gave me the option to ignore and simply write in the work to be invoiced or estimated.
    Thank You

    • You don’t say what type of business your husband has, but yes, you can invoice your customers without using items if you are invoicing them for reimbursable expenses only. I’m not sure if this is what you are doing. But, QuickBooks was designed to use items to record anything you buy and sell. There are twelve different types of items you can set up. If set up and used correctly you have a powerful reporting tool at your disposal. If you need help in setting up any items, I would be glad to help you.

  3. Nita says:

    I was also wondering if there is a way to NOT use the items. Having a garage door business there are so many different factors in the price of one item… EX: one door can be ordered in any size needed, insulated, not insulated, steel backed, vynal backed, with VDS, or without, with any kind of windows, or without, not only that they can be different sizes, with additional hardware, and the list doesn’t stop there. In the long run it would by far be easier to just type out the invoices.

    • Actually, your type of business is a type of business that can benefit from using items. You can set up to 14,500 items in QuickBooks and group items together if necessary. Sure, it is time consuming to setup the item list, but you will benefit from it in that your data entry on invoices will be quicker and you can run reports by items. If you have items set up as inventory items you can also run various inventory reports. All of these different reports can give you valuable information on how your company is doing and help you with making decisions. Hope this helps you with your decision to use items.

  4. April Rollins says:

    Hi! I stumbled upon this webblog while learning quickbooks. I am the new treasurer for my daughter’s co-op preschool. I have never used quickbooks and the treasurer before me didn’t have a clue and left me to learn it completely from scratch! My job is to keep on track with our budget and track income (tuition, fundraising, art/material fee, fundraising fee) and expenses (Operating expenses-phone, water, trash, building maint., etc.) soooo my question is what would be the best place to start:items, chart of accounts or class, I am a little well actually ALOT confused about the differences and which one would fit our need. Thanks so much for any advice. We have an accountant but he doesn’t help with this part, he only does our taxes!
    April

    • April – The QuickBooks Learning Center has some short videos on how to do different things in the program. You can access these videos by going to Help > Learning Center Tutorials. There are several areas to choose from with several topics within each area. In addition to these videos you can do a search on YouTube for instructional videos by individuals on different aspects of QuickBooks.

  5. Bob Horn says:

    When invoicing with an “item”, is there any way to have the amount credited an account other than the assigned revenue account? Such as in a situation when you need to invoice in one month, yet defer revenue to a future month. Presently we have to allow the invoice to post to the revenue account, journal it to deferred revenue, and then journal it back to the revenue account in the future month. There should be a simpler way.

    • You can set up the item to post to a liability account (deferred revenue). You will still have to do a journal entry each month to move the amount from the liability to revenue, but you can set up a memorized transaction for this.

      Hope this helps and Good Luck!

  6. Melissa says:

    We may have the same item that needs to be coded to different accounts, such as COGS, Warrany, or Fixed Assets. Currently, we setup the same items as many times as needed, selecting the appropriate account code each time. Our purchasing dept is not happy with this process. Is there a better way to have the cost record to the needed account? Our volume is to high for the Accounting Dept to constantly monitor POs for corrections, and needless to say, it is a messy way to work.

    • My suggestion would be to add some kind of identifier after the item name. For example, you purchase a refrigerator. You could name the item Refrig-Cogs, Refrig-W, Refrig-FA. Code each item to the correct account. If you have duplicate items set up, you can merge them into one. Edit the item you want to rename, say yes to the pop up box asking if you want to merge. Hope this helps.

  7. Christine says:

    I have QB online. Where it automatically enters deposits made directly into my checking account register. When I run a P&L, it shows income from Sales (the deposits made at bank) and invoices paid. How do I change the item on the invoices so that they’re not coming up into my income. Which is adding extra income into my P&L. On the invoices, I have “service”. What account (income or expense) should this be categorized as? So it won’t add extra income on my P&L? I hope that makes sense??

    • Hi Christine,

      You don’t want to change the item on the invoice, it needs to post to an income account and show up on the P & L. An invoice will debit accounts receivable and credit an income account. When you receive a payment from your customer, this transaction will debit either your bank account or undeposited funds and credit accounts receivable. When you review your downloaded transactions, don’t accept any transaction that has already been entered in the register. Hope this helps.

  8. Lois Skala says:

    I am entering inventory. If an item previously entered into Item Lists is received and I try to put it Inventory Parts, it says it already exists and asks me to rename. Why would you rename an item that you constantly buy and sell? This hasn’t happened in the past. HELP!

    • Hi Lois,

      You are right in that you don’t need to rename an item that has already been entered. Make sure you are clicking on the down arrow in the item section of the form and pick the item you are adding. It sounds like QuickBooks thinks you are adding a new item rather than increasing quantity on an existing item.

  9. Daniel Kifle says:

    Hi Jo,

    I am an accounting clerk at a small business.
    I want to link an item with a balance sheet account. When I select the Service item list, it only lets me pick an expense or income account code. If I want to link an item to a balance sheet account (especially receivable account), how can I do that?

    thanks,

    • Hi Daniel,

      You cannot link an item to a balance sheet account. In QuickBooks an item is something you have bought or something you have sold. If you bought something you have created an expense. If you sold something, in this case you sold a service, you have generated income. Items are linked to income and expense accounts. Creating an invoice for a customer is how you link amounts to accounts receivable. When you create an invoice, choose the service item to add to the invoice. A debit for the amount of the item will be posted to accounts receivable and a credit will post to revenue.

      Hope this helps, if not please ask another question.

      Jo Ellen

  10. Julie says:

    Hi Jo Ellen,

    We are using PO’s for the 1st time and recently upgraded to Premier 2013. We have no inventory and we do no billing, we just want to be able to track late incoming invoices. I’m confused about the items list, do I need to set up an item for every account I have on the income statement or is their an easier way?

    Thank you,

    • Hi Julie,

      No, you do not need an item for each account. You can set up one item, non-inventory, and in the account field choose the income account you want that item to post to. When you create an invoice and use this item, the income account will be credited with the sale and A/R will be debited. If you have more than one income account then you will need an item for each one. Hope this helps.

      Jo Ellen

  11. Christi says:

    Hi! i have a question and I’m having a hard time getting an answer from the internet. I use QB for my husband’s construction company. I’m trying to track job costing . I have found out that I need to create “double sided items” in order to get material purchases and sub contractors used for the job to show up in the customers job reports. My question is, when making a double sided item, how do I choose the correct income account. do I create individual income accounts for each sub contractor, and then just a material income account for all the material we purchase for a job? I don’t want it showing up as construction income rihgt?

    • Hi Christi,

      You don’t need a separate income account for each sub contractor. Your chart of accounts should only have a few income accounts. When you set up the item as a two-sided item, the purchase side is a cost-of-goods sold account and the income account is one of the income accounts from your chart of accounts. When you write a check to a sub-contractor and use one of the items, that check will debit the cost-of-goods sold account. If you have marked the payment as billable, when added to an invoice the income account will be credited. Several items can point to the same accounts.

  12. Barb says:

    I have a question about insurance agent set up in QB. I setup General Agent and the insurance company with the current liability( so we can know to whom we have to send money & how much) and I have problem how do I have to setup the customer payment premium with the invoice? What item should I use on the invoice? This premium we have to pay back to genera agent. The payment from the customer is not our income. Can you please help me with this. Some of the payment goes to General Agent some goes to the insurance company depends on the contract what we have.

    • Hi Barb,

      Set up an item as a Other Charge type. Have the item post to a liability account. When you use this item on an invoice it will debit accounts payable and credit liability. When you write a check to pay the agent use the item tab and pick this item. This will debit the liability account and credit the bank account.

      Hope this helps.

  13. Lisa says:

    Dear Ellen,
    I have a question related to items. Here is what my business is doing: my client will tell me what they want and then I go to buy the product to them. They will pay me a commission . But the supplier will inovice me, and I will inovice my client for the value of the product plus commission. I am trying to create an inovice in which the commission is posting, but the cost of items prodcut is non-posting (don’t effect my income). I need track the whole process but I don’t want the value of the items hiting my income. At same time, when I recevie bill from supplier, I want to record the bill but without hitting my expense too. I want my client pay the supplier directly fo the value of the product , and pay me only the commission. I tried to set up an itme with non-posting account, but it don’t allow me to do it in quickbook. Do you have any suggestions?

    Thanks!

    • Hi Lisa,

      You will not be able to setup an item as a non-posting account. You can use an item on either a Purchase Order or Estimate and it will not post to the general ledger. But you will eventually have to use the PO or Estimate or they will remain as open.

      What you are wanting to do is a reimbursement. When you set the item up, mark the box that says “this item is used in assemblies or is purchased for a specific customer job” This phrase will vary depending on the type of item you are setting up. But, which ever type of item you are using, marking this box will allow you to specify both an expense and income account. You can use an expense account for both sides.

      When you write a check use the item tab and not the expense tab. Choose the item, enter the customer name and mark the billable box. When you create an invoice for the customer click on the Time and Expense tab. A new window will open. Click on the Item tab and mark the item to include on the invoice. Click save. Add any other items to the invoice and click save.

      By writing a check you will debit the expense and credit your bank account. The invoice will debit accounts receivable and credit the income for the commission and credit the expense for the reimbursement (if you chose an expense account on the income side when you setup the item). When you review your reports you will see that income has increased but the expense is still zero.

  14. Chelsea says:

    Dear Ellen,

    I am an accountant and have recently taken a job where they use Quickbooks, which I’ve never used. I haven’t found it difficult to figure out, I find it more difficult that I just know what I want it to do & how to get it to do it…

    Amongst the devastation that was the previous office person’s mess, I’ve found that job supplies that are consumed during the course of the job, either job related or not (COGS or shop supplies) were ALL expensed to a general COGS account, jobs numbers assigned or not. I assume this is because the same item may be a MFG expense or a COGS. What I want to do is, when I buy an item using a purchase order, I would like to specify whether it is a COGS with a specific job, or whether it is an expense like shop supplies or perishable tooling. I have found that once a part is set up, you can only assign it EITHER a cost of goods sold account OR an expense account. Thus the purchaser has no say account-wise.

    My solution, or what I’ve come up with anyways, is to create a two part numbers for the same part; one to COGS and one to an expense account. For example:

    Part # 12ABCd-Q Description: (CGS) End Mill Expense Acct: 5110: COGS: MFG
    Part # 12ABCd -Q Description: (EXP) End Mill Expense Acct: 6120: Shop Supplies

    That way, if purchasing is buying material to a job, all they have to do is select the part number with the correct description & assign it a job number or not. I would also think this should help AP when the bill comes in, so they can properly attach Freight either to COGS w/ a job or Expense it.

    Am I over complicating things? I can’t find anything on the QuickBooks help / internet searches with people with a similar dilemma, which makes me think there is a simpler solution.

    My only other thought is to put it all to either expense accounts OR COGS accounts and journal off the non-job related expenses at month end like they were doing, but I don’t really want to do this… I just want it to work!

    I have to go through and in single user mode switch all the items assigned to the general COGS account to subcategories within the COGS account anyways, so I would just as soon do it correctly and in a way that would be helpful.

    Thanks for your help.

  15. Misha says:

    Hi! Thank you for the information you provided. I am working from a company that just bought a mom & pop business and now we are transferring all inventory (inherited/purchased). In doing so, I have a question’s in regards to adding new items that have the same name, but with different serial numbers. I’ve turned on the advanced inventory option, and added serial tracking to the software so that we can keep track of the inventory. However, I’m stuck. I have inventory that have the exact same name, but all have a different serial number. When I go to add a new item, there is a Serial number button, but it’s to turn on /off the global warnings for this particular item. QB will not allow me to put multiple items into the system with the same name. So my question is, how can I do it. Or is there another way that I do not know of? We have over 700 inventory items that all need to go into QB. Can you assist me? Any advice is appreciated.

    Thank you so much!
    Misha

  16. Nita says:

    When setting up items in QB I am asked to assign an account… On a non-inventory part do I need to assign it to the expense account that was used to purchase the item, or do I need to select “This item is used…” and select the expense account and also the Income account under sales information??

    • If you are going to use the item only on invoices or sales receipt you want to assign an income account to the item. If you mark the box “This item is used…” you are telling QuickBooks that you are using this item as a two sided item. This mean you will be using this item on bills or checks. You want to assign an expense account to the item along with the income account.

      You don’t need to assign every non-inventory item as a two sided item. But it you are going to use it on bills and invoices, then you would need to.

  17. Jennifer Cao says:

    Hello Ellen,

    I have a list of non inventory items in QB. I would like to set up customer items cross reference. Is there such a thing in QB? If there is how do I do that? In case you aren’t clear on what I mean by customer item cross reference.
    For example: I have item A. I sell this item A to customer Ben who calls it item Apple and I sell to Ben at $1. I sell the same item to customer Jen who calls it item Banana and I sell to Jen at $2. Is there a way I can set up such customer cross reference with prices? Thank you.

    • Hi Jennifer,

      If you have one of the Premier editions of QuickBooks you can set up Price Levels per item and associate this with a customer. To setup Price Levels go to Lists > Price Level List. Click on the Price Level tab at the bottom of the window and click on New to add your price level. To add this to a customer go to Customer > Customer Center. Double click on the customer and click the Payment Setting tab. Click the Price Level drop down arrow and choose the price level.

      Please let me know if you have more questions.

  18. Nkechi says:

    I sell supplies but do not maintain inventory. A customer wants a quote for some items. I tried setting up an estimate, created non inventory item.
    My problem is that QB is asking for expense and income account to be selected for the non inventory item. Since I will only buy the items after I have received the purchase order, what accounts do I select?
    Please help!

  19. Jere says:

    I am new to QB and just took over a job. They work with both the expense and items. My question is, what account does the items go to? I have tried to research this but I don’t see where the amounts get posted. The items we post are really not an inventory as they get used for a specific job.

    • You can set the item up as a non-inventory type of item. Mark the box that says “This item is used in assemblies or for customer:job” You can now set this item up as a two-sided item. For the expense side enter and expense account and for the income side choose an income account. When you use this item on a bill or check the amount will be posted to the income account. When you use the item on an invoice or sales receipt the amount will be posted to an income account.

      Hope this helps!

  20. elia says:

    Our church just recently purchased quickbooks 2014 premier, of course we are non profit. The members are set up and in the donation receipt to the right is a tab “class” would that be tithe, offering, missions–income? After that there is item, what would I set up under item if all received is donations for tithe, offering, missions? also, why is there another “class” tab to the right of description? You help Is appreciated. Thanks in advance

    • Hi Elia,

      You are seeing the class field because you have class tracking turned on in Preferences. Using classes is a good way to keep track of money received for different purposes. To set up the classes go to List > Class List. At the bottom of the window click the Class tab and click New. Do this for each class you want to create. Create an Admin/Operations/Overhead (the name should be something that will make sense for your situation) class for anything else.
      Set up a service type item for the money you receive and pick an income account for it to post to. When you receive a donation, on the donation receipt choose the
      item that you just set up, and pick the class this donation is for. If the money is not a donation then choose the Admin class.

      You will need to assign every transaction a class, even your expenses. By using classes you will be able to run a Profit and Loss by Class report. This report will show you the income and expense per class.

      Hope this helps!

      • elia says:

        Thank you for your quick response, ok so let me try and see if this makes sense to you, under item (which would be donation) since every time a member gives they specify where to apply ex. tithe/ missions, do I have to set up different items ex. donations-tithe, donations-missions to keep track? The reason I ask Is because when I am setting up the item it is asking me to designate an acct and of course we have them all separate. I apologize if I’m making this difficult I just want to make sure I do it correctly, thanks again for your blog and help. Also, one more question, can I go back and input the donations for January-april,since we just started in may? wouldn’t that throw off the books totals since we have to deposit the donations receipt? or should we wait till next year to start from the beginning of the year?

        • Hi Elia,

          You will need an item for each income account that is in your Chart of Accounts. You can only set up one income account for each item. But, you can have multiple items point to one income account. Hope this makes sense.

          Yes, you can go back and enter all the donations from the beginning of the year. And I would definitely do that so you can send reports at the end of the year to the donors. If the deposits have already been recorded in the register you don’t want to make the deposit again. The deposits have already posted to your income accounts and entering the receipts will record them again to the income accounts, but they can be cleared out by following instructions in this blog on Clearing the Undeposited Funds Account. You will want to do this by month and by account or class.

          Hope this helps!

          • elia garcia says:

            Mrs Peters, Thank you so much for your blog, you truly are a blessing, I went over to the link you suggested, However, I have not entered anything in quickbooks from january to april yet. I will try doing it with one tomorrow and let you know how it goes.Thanks again.

          • elia garcia says:

            it’s me again, im sorry, what if i haven’t deposited anything? Do i still have to use this clearing the undeposited funds acct steps?

          • Hi Elia,

            The undeposited funds account is a holding account until you make the deposit. Think of it as your desk drawer. A customer give you a payment, you give the customer a receipt showing they made a payment. You put the check in your desk drawer until you go to the bank. Before you go to the bank you take out all the checks you have received, enter them on a deposit ticket, total the ticket and take the checks and deposit ticket to the bank to make the deposit.

            When recording the transactions in QuickBooks you Receive Payment from customer. This will debit the undeposited fund account and credit either accounts receivable or an income account is using the Sales Receipt. You record each payment in this manner. When you have taken the deposit to the bank then in QuickBooks go to Make Deposits. A window will pop up showing all the payments you have received. Mark all the payments that were in the deposit you took to the bank. Click OK. On the next window enter the date of the deposit and save. This will debit the bank account and credit the undeposited fund.

            Please keep in touch and let me know if you have any more questions.

          • Elia Garcia says:

            Good morning,thank you for your quick response. I understand the deposit process, what I am confused about is entering the deposits since January…but that $ of course will throw off my register,that’s why I was asking if that link you sent me was the correct process to do keep it balanced. I’m sorry for the confusion..I just don’t want to do something I can’t reverse. You have been a great help, thanks for your blog ;)

          • Hi Elia,

            If you have not entered the deposits as a transaction in the checking register then if you go to Record Deposits and mark the payments that make up a deposit total, click OK, then the next window that pops up will be the window that will record the deposit to the register. This is where the checking register will be debited for the amount of the total deposit and the undeposited funds account will be credited. If, however you have entered the deposits into the checking register without going through the Make Deposit window, then you don’t want to record them again. Have you reconciled your bank account? If so, and it balanced when reconciled the deposits have already been entered in the register. In this case you will need to clear out the undeposited fund account by month and income account as described in the article.

            Hope this helps, please let me know if you have more questions.

  21. Leslie M says:

    We have an item, say gloves, set up in the item screen coding to “medical supplies”.
    However when it’s being ordered on the PO for Lab dept we want it to go to “lab supplies” but find that even if we use Lab as the account designator on the enter bill screen, the account the item is originally set up as is what drives the reporting on the P&L.

    How can we change this?

    • Hi Leslie,

      In order for the gloves to post to an expense account on your purchase order the gloves need to be setup as a two-sided item. To do this, go to the item in the Item List, highlight the item, right click and choose Edit Item. Mark the box next to “This item is used in assemblies or is purchased for a specific customer:job”. This will add a Purchase Information box to the window. In the Expense Account field choose the account you want this item to post to.

      You do not have to use an item when entering your bills. You can click on the expense tab and pick an expense account to post directly to that account. If these gloves are for your use and you are not reselling them, I would use the expense tab for this purchase. If you have gloves that you purchase to sell and gloves you don’t sell, I would set up two different items so you can track the cost of goods sold for the gloves you are selling.

      Hope this helps and good luck!

Leave a Reply