- Inventory In Quickbooks Enterprise
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- Inventory Management In Quickbooks
- Quickbooks Enterprise Inventory Training
Nov 19, 2012 I have done QuickBooks training for many years and the most difficult thing to teach in my quickbooks classes is Inventory Management. This article, I wrote for Intuit, Inc maker of QuickBooks for a whitepaper released on November 2012, shortly after the launch of QuickBooks Enterprise V. QuickBooks Enterprise Advanced Inventory - Platinum Edition. Your Enterprise subscription comes with one user of Intuit Field Service Management ES. You can integrate the system with QuickBooks and self-assign work orders. Contact Sales when you are ready to add more users to your dispatch board. Create a master inventory list in one.
- To install and set up Enterprise Solutions, refer to the QuickBooks Enterprise Solutions Installation and Setup Guide. Audience of This Guide The QuickBooks Enterprise Solutions User Guide has been prepared for accounting and business management professionals who manage business finances, inventory, customers, vendors, and employees.
- QuickBooks® Desktop 2020 includes a variety of new and improved features that help our clients get paid faster and work more efficiently, all while improving the reliability and experience of using the software. In addition, QuickBooks Enterprise Solutions’ users will find that this year’s release improves the management of fulfilling customer order faster and with more.
- Download QuickBooks Missing Manual (PDF). QuickBooks Enterprise - Inventory Workflows & Enhanced Inventory Receiving (49:47) QuickBooks Enterprise - Custom Reporting Tips and Tricks (59:23) QuickBooks Enterprise - For Constructions and Contractors. Certified QuickBooks User Study Guide.
- Jan 13, 2016 4 Ways to Improve QuickBooks Inventory Management Performance. Let’s take a look at 4 ways QuickBooks users can extend advanced inventory control: 1. Automate Demand Forecasting: When it comes to sales and promotion management, QuickBooks has the ability to help finance and accounting manage historical data points and active inventory metrics.
Inventory In Quickbooks Enterprise
Tracking inventory in a manufacturing firm is more difficult than in other types of businesses. When you boil down everything to its essence in QuickBooks, the problem stems from a couple of tricky accounting requirements:
- In a manufacturing environment, the manufacturer combines raw materials items into finished-goods items. This means — and this is the challenging part — that the manufacturing process reduces the inventory count and value for some items (the raw materials or the components) and at the same time increases the count and value of the other, finished-goods items.
- In a manufacturing environment, the rules say that you don’t just count the value of items in the finished-goods-item inventory values. You also count the cost of labor and factory overhead used in manufacturing the items.
QuickBooks solves the first problem related to manufacturing inventory, but it doesn’t solve or address the second problem. Fortunately, as long as you’re a small manufacturer, you probably don’t need to worry too much about the second problem. You should ask your CPA about this. But don’t worry — Congress and the Internal Revenue Service have provided a bunch of loopholes that make the accounting easier for the small guys.
Handling manufactured inventory the simple way
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If you’re using QuickBooks Pro or some earlier versions of QuickBooks Premier, you don’t have the ability to account for the manufacture of inventory in QuickBooks. The best that you can do is group items to combine into individual items in a customer’s invoice.
This approach sounds sloppy, but it isn’t quite as bad as you may think at first blush. You can choose to show only the group item in a customer invoice. This means — getting back to the example of the florist selling red roses and vases — that the florist can “manufacture” a crystal vase of a dozen red roses and then show the manufactured item as a group item in the customer’s invoice.
The one thing that’s problematic about the “just use a group item” approach is that it doesn’t give you a way to track the finished goods’ inventory values.
Performing inventory accounting in QuickBooks
To account for the manufacture of inventory in QuickBooks Premier or QuickBooks Enterprise Solutions, you add inventory assembly items to the Item list for those items that you manufacture. You also record the manufacture of items as you … well, manufacture them.
Suppose that Pine Lake Porcelain mostly just buys and resells coffee mugs and other porcelain doodads. But also suppose that once a year, Pine Lake Porcelain assembles a collection of red coffee mugs into a boxed St. Valentine’s Day gift set. In this case, QuickBooks can record the assembly of a boxed gift set that combines, for example, four red coffee mugs, a cardboard box, and some tissue-paper wrapping.
Adding inventory assembly items
To describe manufactured items, follow these steps:
- Choose Lists → Item List.QuickBooks displays the Item List window.
- Click the Item button in the Item List window, and choose New from the drop-down list.QuickBooks displays the New Item window.
- Choose the Inventory Assembly item from the Type drop-down list.QuickBooks displays the Inventory Assembly version of the New Item window.
- Specify the account to use for tracking this item’s cost when you sell it.QuickBooks suggests the Cost of Goods Sold account. If you’ve created other accounts for your COGS, however, choose the other appropriate account.
- Describe the manufactured item.Type a description of the item that you want to appear in documents that your customers see, such as invoices. (QuickBooks suggests the same description that you used in the Description on Purchase Transactions text box as a default.)
- Enter the amount that you charge for the item in the Sales Price box.
- Indicate whether the manufactured item is subject to sales tax by using the Tax Code drop-down list.
- Use the Income Account drop-down list to specify the account that you want QuickBooks to use for tracking the income from the sale of the item.
- Identify the components that go into the finished item.Use the Bill of Materials list to identify the individual component items and the quantities needed to make the inventory assembly. Each component item goes on a separate line in the list. Not to be too redundant, but do note that you identify both the component item and the number of component items needed.
- Identify the asset account.Specify the other current asset account that you want QuickBooks to use for tracking this inventory item’s value.
- Select a build point.Use the Build Point boxes to specify the lowest inventory quantity of this item that can remain before you manufacture more. When the inventory level drops to this quantity, QuickBooks adds a reminder to the Reminders list, notifying you that you need to make more of the item.
- Ignore the On Hand and the Total Value boxes.See that On Hand box? Leave it set to zero. To enter a number now is to record an uncategorized transaction, and you don’t want to do that. Go ahead and leave the Total Value field set to zero, too.
- Leave the As Of box empty, or enter the current date.It doesn’t matter.
Recording manufacture or assembly of items
To build some assembly, choose the Vendors → Inventory Activities → Build Assemblies command. QuickBooks displays the Build Assemblies window. All you do is choose the thing that you want to build from the Assembly Item drop-down list and then enter the quantity that you (or some hapless co-worker) built in the Quantity to Build box in the bottom-right corner. Then you click either the Build & Close or Build & New button. (Click the Build & New button if you want to record the assembly of some other items.)
Here are some things to remember about the the Build Assemblies command:
- In the top-right corner of the window, QuickBooks shows the quantity of the assembly that you have on hand and the number of customers who have placed orders. That’s pretty useful information to have, so remember that it’s there.
- A table in the Build Assemblies window shows you what goes into your product. Not that you care, but this is a bill of materials.
- At the bottom of the bill of materials list, QuickBooks shows you the maximum number of assemblies that you can make, given your current inventory holdings.
- When you build an item, QuickBooks adjusts the inventory item counts. If you make boxed gift sets, each with four red mugs and two wrapping tissues, QuickBooks reduces the item counts of red mugs and wrapping tissues, and increases the item counts of the boxed gift sets when you record building the assembly.
Some of the components used in an assembly may not be inventory items. You can use noninventory parts in an assembly.
Managing multiple inventory locations
QuickBooks Enterprise Solutions lets you deal with the record-keeping challenge of storing inventory in multiple locations. To turn on this capability, called Advanced Inventory Tracking, choose the Edit → Preferences command, click Items and Inventory, click the Company Preferences tab, and then click the Advanced Inventory Settings button.
If you’re using the Enterprise Solutions version of QuickBooks, QuickBooks displays dialog boxes that allow you to build a list of inventory sites, and also adds fields to appropriate windows and dialog boxes so you can track inventory items by site. If you’re not using the Enterprise Solutions version of QuickBooks, QuickBooks displays information about how you can upgrade to Enterprise Solutions.
I have done QuickBooks training for many years and the most difficult thing to teach in my quickbooks classes is Inventory Management. This article, I wrote for Intuit, Inc maker of QuickBooks for a whitepaper released on November 2012, shortly after the launch of QuickBooks Enterprise V. 13
Instruction Manual
Businesses that handle inventory, know that managing inventory will make or break the business. In today’s global market, heavy competition, and all buyers-suppliers being interconnected with the Internet; the margins on the merchandise get smaller and smaller each year. Handling inventory may present so many costs, such as: warehouse costs, warehouse personnel, admin staff doing bookkeeping and paperwork management, spoilage, shipping costs, controlling and securing the assets, equipment to handle inventory, etc.
When the business starts small, it’s typically easy to handle when inventory quantities are low and most sales are done with “just-in-time” inventory, which means: only purchase when clients order. However, most successful medium and large size businesses owners will confess that it would have been impossible to increase the size of their business without significantly improving the way inventory is handled. Companies like Amazon and Wal-Mart attribute its success on its top-notch supply chain management: low product costs, having the right amount of stock to handle demand, high inventory turnover, fast and efficient sales fulfillment.
But small and growing businesses sometimes cannot make that shift into medium-large businesses, mainly due to the challenges of managing inventory. At the heart of all this is a system. In today’s world, this system would consist integrating business processes and having en effective computer system to handle accounting and inventory.
“I was always a kid trying to make a buck. I borrowed a dollar from my dad, went to the penny candy store, bought a dollar’s worth of candy, set up my booth, and sold candy for five cents apiece. Ate half my inventory, made $2.50, gave my dad back his dollar. “
Guy Fieri – Food Network
There are some great success stories of businesses making that shift, such as Carlos with Prime Tobacco Co.
Carlos owns a Cigar Wholesale and Distribution Business in Tampa, FL. Started as a Cigar Aficionado, and had many friends in the industry which he met in the many cigar bars in Tampa. Before starting his business, he was an Inventory Manager in a large wholesale electronics exporter. In the midst of his entrepreneurship endeavor, he never really focused on setting up strong inventory systems or accounting controls as the overwhelming amount of new orders caught him by surprise. At the beginning it was all about fulfilling the orders and meeting client’s expectations.
Within two years of starting his business, he found himself in an interesting situation: the company had broken the break-even mark, sales started get larger and more complicated, product quality was getting more demanding… but most importantly, he realized that the most profitable sales where when he sold inventory that he had in stock. Naturally, the market paid a premium to get the product now, versus taking backorders the clients had to wait 2 weeks for. So Carlos decided to get a larger warehouse, invest in temperature control equipment to be able to keep the product fresh for weeks, and to increase his profit on sales (and potentially get new sales) from customer needing immediate product. With an entry level accounting software, there was a very manual inventory system that was very laborious, but gave him confidence that orders and purchases never fell through the cracks. Among other challenges, his wholesale clients are also now asking for longer credit terms which made accounts receivable management even more crucial and some for his retail clients were requesting consignment inventory to allow end-customer to purchase more
There was still risk of perishability when inventory sat in the warehouse too long, and he learned it the hard way. Some orders started to get returned due to quality and some clients started to get reluctant from buying product he had stored in the warehouse. The conundrum that Carlos was facing to reduce his reputation risk in the quality of his product was to either decide to stop carrying inventory and go back to backorder-only sales or essential transform the way he managed inventory. To achieve this he:
- Had to find a way to forecast sales of specific products, to help him purchase just the right amount of inventory
- Needed a real-time inventory report to always know what is available and how long is been sitting there to ensure sales staff focused on moving those first.
- Increasing the speed to fulfill sales faster.
- Being able to control inventory that his smaller retail customers were asking to send in consignment
“We want to turn our inventory faster than our people”
-James Sinegal , Co-Founder and former CEO of Costco
-James Sinegal , Co-Founder and former CEO of Costco
Inventory Management In Quickbooks
So the goals were clear. But the challenges were: potential high costs of a sophisticated inventory system, learning curve of new system and potential high re-training costs, and potential loss of control by giving up current manual system. Carlos started to do the research to use the same system he was using in his old job where they were managing ten times the amount of sales and had twice the amount of inventory to manager. However, this was one of those systems that take six months to implement and an additional six months to have the staff master; and the support was very limited to very specific consultants. Now the dream was shattered where the entire costs of the system was over a hundred thousand dollars.
So realistically, he needed a solution that would be implemented in less than a month, with a short learning curve like his current QuickBooks Pro being used to process sales and perform bank reconciliations, and lastly he needed to have support that was very accessible from the manufacturer, available documentation and accountants/consultants that understood it.
In September of 2012, he reviewed a few presentations from consultants that focused on working with “medium size” businesses, that presented solutions under ten thousand dollars for software, implementation, and training… and went with QuickBooks Enterprise with Advanced Inventory. He chose this solution because of the following features catered to his overall needs:
- Ease of use: The learning curve was relatively short, because most staff members already had worked with QuickBooks Pro in the past to do estimates and invoices. The company’s comptroller liked the ability to still be able to download transactions from the bank to reconcile the banks.
- User controls and flexibility: he was able to start with 5 users and have the flexibility to upgrade to up to 30 users. All staff members, including: admin staff, warehouse personal, and traveling sales people all had access to the system. And Carlos was able to have control over what user is allowed to do which specific functions, and have an audit-trail of all work being done.
- Database size: his list of known cigar bards was over 500, and each brand had an average of 100 different types of cigars when you counted the different sizes, styles, vintages, etc. QuickBooks enterprise was able to handle 50,000 items without any issues.
- Support: the are over 55,000 Certified Consultants in the U.S. so he had confidence that there would be help if needed. And the company’s CPA was able to still get the QuickBooks file to import to their tax software.
Quickbooks Enterprise Inventory Training
But, where he really saw the advantage, was on the Inventory Management features this upgraded inventory system had to offer:
- Auto-PO: He how had the ability to have the system suggest what products to buy based on the minimum amounts he needed to have based on the forecasted sales. Buying the right amount of inventory allowed him to take advantage of more “need-it-now” sales while lowering the risk of spoilage.
- Barcode Scanning: inventory staff members had limited access to QuickBooks Enterprise, but still where allowed to receive inventory as soon as the product came through the warehouse doors by immediately scanning it. And weekly cycle counts where attainable, before it was a weekend event and the company could only afford to do this once per month. Inventory was now closer to real-time and sales staff where able to offer available inventory just by looking at the system.
- Lot Tacking and FIFO Inventory Costing: in contrast to the other system being used, QuickBooks Enterprise keep track of the historical inventory cost via First In First Out which was aligned to the philosophy to make sure the older product was sold first to increase the average freshness of the cigars in stock.
- Multiple Inventory Locations: now he was able to keep track of his own inventory in the warehouse plus inventory at every Retail store he was going to send consignment to.
- Bin Location Tracking: to be able to quickly store, pick, and count inventory; there was a need to assign specific bins or racks to located it within the warehouse and QuickBooks Enterprise has the ability to do so.
- Inventory Pictures & Attachments: he use to have two inventory databases, the one that was stored in QuickBooks and the one he had with all the pictures of the products, and it was often cumbersome to make sure that they both matched. With QuickBooks Enterprise, he was able to have the picture of each product loaded in the system and made it so much easier for the sales staff to identify or clarify the products the client requested. Also they were able to attach the certificates of authenticity to specific products and transactions to keep track of very special orders some clients made.
- Faster Find and Selection of items: with over 50,000 items and little variation to the part names/number, it is very convenient to be able to search within the product, description, or custom field to find the correct item.