WSW - Podcast New Inventory Enhancements in QB Online
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[00:00:00]
Welcome and Audio Check
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Dan DeLong: Oh, welcome to another workshop Wednesday. Casual conversations for serious workflows brought to you by school bookkeeping.com where it's keeping learn, keeping you learning QuickBooks your way. Hi Rachel. How are you?
Rachel Dauchy: I'm good. I hope you can't hear. We have a weird. Tornado [00:01:00] siren going on outside.
Dan DeLong: Oh I heard something in the background, but I wasn't sure what it was.
Rachel Dauchy: Yeah, I don't know if it's a tornado siren because we, I don't think we get tornadoes here, but it's some kind of siren. It's weird. We just get those randomly. I don't know.
Dan DeLong: Yeah, if you if you blow away, we'll know. We'll know what's happening.
Today Topic Inventory Updates
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Dan DeLong: Last week I, first I wanna apologize because. I've, been struggling with, these, live, the quality of these lives webinars with trying to figure out bandwidth issues and who needs to click what button and all that stuff. And so I, wanna know if anybody is watching if they could reply into the comments and let me know if I look and feel better, because that's what's important.
If, I [00:02:00] sound okay, or if I look if I'm not pixelated, because I was noticing that our live streams for some reason I'm hogging up all the good data or somebody else's. In this house.
and and it wasn't a very good quality. And I, would prefer not to, have that happen. We're trying something different today, so please let us know in the comments if you if the quality of the stream is better or worse, or. Not because it's hard to tell, when we're, trying to, do this.
Today we're gonna be talking about some of the inventory enhancements that have occurred in in QuickBooks online over this the past few months. And we'll, talk about a specific topic that I wanna make sure that everybody [00:03:00] is aware of the financial ramifications of. Because, 'cause when I worked at Intuit, it was some, it was one of those things that I said it so many times. I felt like it, it should be recorded. So here we are we're recording something that I've said multiple times before and I wanna make sure that that the message gets across.
Now.
When QBO Inventory Works
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Dan DeLong: Rachel, you're very heavily focused on inventory. In, in, in QuickBooks Online, and you still work in the online space. Where do you draw the line with tracking inventory inside of QuickBooks Online and where? You're, looking at other alternatives like CIN seven or Katana or other inventory management solutions.
Rachel Dauchy: Most of our clients that are tracking inventory [00:04:00] don't track it in QBO. And really it's because of a lot of different reasons, and we've talked about this many times. I do have.
Bundles Kitting and SKUs
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Rachel Dauchy: Clients we've talked before about how, if they're really assembling or manufacturing anything, we don't want to do that in QBO.
I also have another client that is creating a bundled package, but it needs to have its own individual skew. It can't do that in QBO because QBO has bundles, but it's really meant for bundling some items together and selling them. Still with their own individual skews. And so that's what he was originally trying to do.
And then we realized, no, what he actually does is he buys, a container and then he puts individual [00:05:00] items that are not, it doesn't really matter. They're not sold individually, but they could be sold individually, container.
A bundle, but basically what he is doing is he is taking widget A, widget B, widget C, and he's putting together, putting them together and creating widget D that you can't do in QBO inventory. Really the only thing that you can do is you can put widget A, B and see together in a bundle and sell them together, but they're still identifying as those three items.
So that's bundling in QBO, and that's not. Kidding, right? Because kidding is different. So like you'll hear me use some of these terminologies that we use and a lot of 'em can't be done in QBO. So you and I have talked before about. Clients that buy stuff and they don't do anything [00:06:00] to that stuff, they just leave alone and then they resell that stuff.
And I typically call those guys resellers. And so if you're reselling stuff, you can do that in QBO, even if you have a lot of skews. And so it's funny because. I still think there's a lot of confusion out there because I just got an email even earlier today that somebody was asking me a question about a client of theirs that they only have 40 SKUs, and I've learned throughout the years it's not even about how many SKUs.
And that's a big misconception. It's really what are you doing with the items that you're buying, and that's really what it boils down to is that's, you really need to know. So all of my clients, sorry to answer your question. This is like a long answer, but No, this
Dan DeLong: is great stuff. This is great stuff.
Rachel Dauchy: All of my clients that buy stuff that anything needs to be done to retrofit it, change it, assemble it in a way, kid it [00:07:00] or anything, even if he's only got five things. It's gotta be in an external app. So I do have some clients that simply buy stuff and they even have hundreds of skews, but all they're doing is buying it and reselling it.
It can go right in QBO and then we can do individual invoices out of QBO and it's no problem at all. That's really the answer is I do have some clients that are doing. Counting the items, the movements of the items in the increasing of inventory quantities, the decreasing in of inventory quantities in QBO.
It's very few and far between that do, but it can be done. And I did notice when I was spoken around the advanced settings the other day, there's lots of things going on with inventory now that they have added so. And again, it's really not in all [00:08:00] QBO subscriptions, I think it's in some versions and then another version's not.
So I'm very excited to hear what you have to say.
Dan DeLong: Yeah this is and we talked about this when we talked about the Intuit Accountants Suite. Yeah. Features is that the features that these features are designed to address is new. New people, right? Yes.
You're not gonna see any of these features and go, aha, we can ditch since seven because they now support item receipts. No. Yes. It's, there're is likely, these are incremental changes that they're adding and it's still in service to you. What you what you, call a, reseller, right?
Where I do I, buy the stuff. I sell this, I sell that same stuff, and I [00:09:00] don't do anything to that stuff before I sell it and right. Point that you made about bundles is really one of those fundamental things about the difference between what QuickBooks and desktop will call an assembly item versus a group.
And Yeah, QuickBooks Online, they introduce another term called bundle.
Rachel Dauchy: Yeah. And it's really confusing and I have to say, like even just. What I think still shocks me is that I think the amount of misconception that people think that QBO inventory can do and it's really not much.
Omnichannel Needs External Apps
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Rachel Dauchy: And, I received actually a referral the other day and the guy had listed out what he wanted to do in track and QBO.
He was in Shopify. He was in Amazon, he was in. EBay, he was in all of these marketplaces and a sales platform and wholesaling, and he wanted all of this tracked in QuickBooks Online. I had to [00:10:00] explain to him that can't be done. It just can't. And I think that a lot of people really don't know what can be, and I think it's really, important that we talk about this because the technology is moving so fast, especially with e-commerce selling and, I just don't know that QuickBooks can catch, keep up with what people are really, truly needing.
Dan DeLong: Yeah. It's definitely a mixed message when you see that there is marketing on, on, into its website that says track quantities on hand. And inventory tracking as a feature of plus or advanced.
Rachel Dauchy: Yeah.
Dan DeLong: And then come to find out. Oh no, it's,
Rachel Dauchy: It's not, for, it's not for omnichannel e-commerce. It's really not. It's really, you know what? I think it would be great for the good old Craig's [00:11:00] Landscaping, right? That might sell some gardening tools along with their service and they need to count how many they have going on.
And there's no reason why it can't do something like that. But I think in the world of. Omni channel e-commerce manufacturing, forget about it. Yeah. And I'm starting to get frustrated with the, in insinuation that can be done there because it can't.
Advanced Inventory Dealbreakers
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Dan DeLong: And we had when we did our workshop series with Katana, we were talking about the advanced inventory functions.
And anytime. That you have those core advanced inventory needs of I need to track my inventory in different locations, or I need to track the traceability of an item by a serial number or lot number with an expiration date. Or I need to track, landed [00:12:00] costs. Yeah. Or the, all of these things, multiple units of measure.
Yeah. Those types of things. Anytime that ventures into the equation, QuickBooks online is not going to be that source of truth for inventory tracking. Yes. So simple inventory tracking of I purchased some stuff, I have it for a period of time and I'm gonna sell that same stuff later.
That is okay. But it, so
Rachel Dauchy: it's really for the equivalent of like kind of some of those bookkeeping businesses out there that are like. They see on social media, they're like, we start at 3 75 a month to do your bookkeeping asterisk. And and in a perfect world, it's really maybe one checking, one business checking account and very a handful of invoices per month or something like that.
But that's what they really mean by that. And it's [00:13:00] very limited. Yeah.
Dan DeLong: Yeah. When you start to add those aspects, even if they're reselling the same items the, aspect you talked about of in. Different channels, right? So Amazon, on their Shopify website, eBay, Etsy, right?
You, go into, the integration section in, QuickBooks online, and look at that. There's all these connectors, right? You know that when you're doing all of them if you're doing one of them, that might be okay, but if you're doing multiple. Sales channels and trying to connect them and, use QuickBooks Online as your source of truth for inventory tracking.
That's gonna be. A big mess. Because
Rachel Dauchy: And, a lot of times they're expecting that it would, that QuickBooks online will also push the inventory levels back [00:14:00] to those marketplaces and platforms and that absolutely doesn't happen.
Dan DeLong: Exactly.
Rachel Dauchy: So
There's, really, it's really gotten to the point where if anybody is selling in more than one place.
And needs to, manage their inventory, quantity movements. They really need to be in an app. And and that's my,
Dan DeLong: yeah. And then QuickBooks then becomes just the resting pit place of the financial impact of all of that. All of that movement elsewhere.
Rachel Dauchy: Yep. So the stock journal entries will be sent to QBO, decreasing inventory, increasing cost to get sold, but the movements of the actual quantities.
Live in the other place.
Dan DeLong: Yeah.
Inventory Feature Comparison Tool
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Dan DeLong: So I'm gonna I put in the chat, a link and I'm gonna share it here. Share my screen here. So we have [00:15:00] on school bookkeeping, we have an advanced inventory page, right where we talk about the QuickBooks enterprise features. We break down the different, key.
Advanced inventory functions. But the down here is a really cool resource which has comparing your inventory features by QuickBooks version, right? So, if you just scroll through here, you can see on the left side, anything that might be of, interest to you and your business, right?
So complex inventory, product alternatives to suggest when there's a short. Whoops. Apparently you're not supposed to click on it during a live webinar. But price levels based on percentage of sales price, right? It'll tell you which version has those things. Sales order fulfillment [00:16:00] worksheet with batch pick list, right?
Which, which version will have that, right? So you will see a couple nos here. So pro and plus or advanced don't have the, that functionality, right? This will help guide. What version of QuickBooks, if that version of QuickBooks can handle those native functions for inventory tracking.
But that's all here. On this, page, assuming you don't click on the spreadsheet it won't collapse on you.
We do have as, part of our. Course offering at school, bookkeeping, a inventory fundamentals where we break down these concepts of periodic inventory versus perpetual inventory versus, tracking things on hand. That the way we break it down by, I buy stuff and they sell stuff, or I buy stuff, I do stuff to that stuff and then I sell other stuff.
So [00:17:00] we break the, break those concepts down. So if you want to take a look at that you certainly can. And, oh, look, there we are at the bottom.
Why Inventory Is Satisfying
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Rachel Dauchy: I have to say that, you know what, like I, I know that inventory can feel scary to people, but I love it. And the only reason that I say that is because it's one of those things that is so easily misunderstood and it's so difficult to unravel when there's problems, but.
It's so satisfying and it's one of those things where business owners really can get in the weeds with it and as satisfying as it feels helping a client gain financial insight into their books or a lot of dissatisfaction that. A lot of us feel pro advisors, bookkeepers accountants we don't do it necessarily just for the money.
We do it to [00:18:00] help clients understand their business better. And when you get into this area and you can potentially do some good, shed some light on something that is really a dark and mysterious mess. That's the pinnacle. So I have to, say I love it. I love working in inventory.
Dan DeLong: Yeah. When you get it right, it's chef's kiss, right? Yes.
It's like the egg sandwich I had today with peanut butter. Oh,
Rachel Dauchy: what? Okay, I got it. I hear that
Dan DeLong: it was actually wasn't so bad. Anyway. So the first thing we want to talk about and this is one of those things like this conversation that we're having is the conversation that the accounting profession has pretty much had about QuickBooks Online is this mindset [00:19:00] that QuickBooks can't do, QuickBooks online, can't do inventory.
Yes it does, with an asterisk, right? And really understanding what. The what, the limitations or what the prebuilt limitations of of the inventory tracking. And if it checks all the boxes for your customer. Yeah. It can track inventory yeah.
Sales Orders in QBO
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Dan DeLong: The other, one of the other common things of QuickBooks Online doesn't have x is.
Or was sales orders. So QuickBooks Online never had this concept of a, sales order. Which in general a sales order is a, an a non posting transaction that sits between a quote
new-inventory-enhancements-in-qb-online-Mar-18-2026-restream: Yeah.
Dan DeLong: And then invoice. So QuickBooks in its infinite wisdom has [00:20:00] taken that.
That to be what sales orders are as far as its definition, it's a transaction that does sit between an invoice and an estimate. You can copy an estimate into a sales order, you can copy a sales order into an invoice, right? So there is this workflow of linked transactions to connect between these two. Yeah,
Rachel Dauchy: it's part of the inventory workflow,
Dan DeLong: right?
Rachel Dauchy: Oh, what I was gonna say is, you know what's nevermind. I was gonna ask you a question about sales orders and QBO, but I don't wanna derail you. Keep going.
Dan DeLong: Yeah.
Available vs On Hand Quantity
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Dan DeLong: One of the functions of QuickBooks Desktop when it came to sales orders. Is the ability to track what's called available quantity, and that available quantity is the, [00:21:00] the amount that you have on hand minus what you have promised for other things, right?
And that there could be, yeah, in quick, in QuickBooks Desktop, there could be two promises. Promises could be a sales order, right? So I've, created a sales order. For an inventory item. So I promised, that or my customer has promised that they're going to buy it. But I can't. Sell it out from underneath them, because that would be an awkward situation.
Rachel Dauchy: Yeah. Yeah. And if anybody is an Amazon seller, they know exactly what you're talking about with available quantity and, and on hand. It, there's different levels to that. It's very complex. And so really at the end of the day. It really doesn't matter what your total [00:22:00] inventory amount is, it's what's available that is most important,
Dan DeLong: right?
When you go into Walmart, right? And you go to get something and the shelf is empty, what's the first thing you do? You go to find somebody and say, Hey, do you have any in the back? Yep. Because the available quantity is essentially what's on the shelf. Yeah, but the on-hand quantity is what they truly have in the store.
And so it's quite possible that they have promised right a one of those items to somebody else. And that's what sales orders would do, is they would reduce the available quantity so that somebody else who might come in and say, I want that same thing, doesn't buy that. Out from underneath somebody else, right?
Yeah. The old ways of Hey, could you put this behind the counter and put it, yeah, put it on hold. That's putting that guardrail, [00:23:00] right? The reality of put it in the available quantity or take it away from the available quantity so this doesn't get sold, but from somebody else, even though the physical inventory scanner or whatever it is, says, Hey, it looks like we have three in stock.
Rachel Dauchy: It's like
new-inventory-enhancements-in-qb-online-Mar-18-2026-restream: this.
Rachel Dauchy: It's the virtual version of the, customers in the store fighting for the, teddy patch
Dan DeLong: kids. They're elbowing each other for the cabbage patch doll or the, or whatever the next. Christmas fad toys. Yeah.
QBO Sales Order Limitations
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Dan DeLong: Here's the thing is that from everything that I've seen, sales orders and QuickBooks online don't deduct the available quantity.
No,
Rachel Dauchy: they don't. They don't.
Dan DeLong: There's no, warning. Really. And there may be right? Like that may, just because it's the way things are today doesn't mean that's the way things are gonna be tomorrow. But [00:24:00] as of today, sales orders don't do that.
Rachel Dauchy: No. And you know what else is in the transaction list?
Under customer, you can't find the sales order. No. And that's another thing that's driving me crazy 'cause I've got a six seven client that everything syncs over to QBO from since seven and including all of the sales orders. And as a matter of fact, in since seven, the sales order is what posts the, inventory reduction and the cost of goods sold, not the invoice.
So those actually come over with. And implication behind it, but you can't see those in the customer. Sorry. The, yeah, the customer transaction list. I don't know why. And so it's, to me, it's it, doesn't make any sense.
Dan DeLong: So you're saying, so here I have a sales order too. 1, 2, 3 scheduled.
You're saying that in the. In the, if I go to the, this customer sales order, this [00:25:00] sales order won't show.
Rachel Dauchy: Yeah. If you go to the customer profile and then you look at all transactions, you won't be able to see it.
Dan DeLong: Come on now. This is so trying to get to it. There we go. Gotta sneak up on the navigation here.
So 1, 2, 3 schedules. I click on this and transaction list.
Rachel Dauchy: Yeah. They're not there.
Dan DeLong: Enough of the term, I don't need this. Okay. Yeah, you're right. That
Rachel Dauchy: yeah. So that's weird. And that, to me, that's a big problem because Now is that a problem for maybe sales orders or invoices that are created in QBO?
I don't know, but for a lot of. People like us that are using it as a destination for all of these sinks. I'm bringing in lots of sales orders and the fact that I can't find them except for a search, is, very unacceptable.
Dan DeLong: Yeah.
Finding Sales Orders in QBO
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Dan DeLong: To, so to access [00:26:00] them, you would go to sales and. Get paid, and then that's where your sales order list is.
Rachel Dauchy: Okay. And then I, you can just filter by customer there.
Dan DeLong: Yeah. So you got, or,
Rachel Dauchy: but a lot of times I just go straight to the customer and Right. Especially if I'm doing, I wanna see all invoices. I wanna see all. Things all at once. And so that's usually my quickest place to go. And again, it's just like screwing with the way I do things and, Intuit must do it the way I want it.
Dan DeLong: It, it, doesn't make sense, right? If you're gonna have all of these other transactions, even the non posting ones show on the customer record. Yeah. What's the point of putting the customer on the transaction if it doesn't show on their customer record?
Rachel Dauchy: Yeah. And if you look at vendors, you can see pos.
Why can't I see sales orders on the flip side?
Dan DeLong: Yeah, it's definitely one of those, oh, who did that? We forgot to, add that,
Rachel Dauchy: yeah. [00:27:00] I wanna know who did that. I don't like it.
Dan DeLong: So the real start purpose of this, I'm speculating and guessing, right? Because I'm trying to as assign meeting to, a, a, gap in what? In what?
Sales Order Gaps
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Dan DeLong: What they have. So we've identified two gaps. One, sales orders don't show on the customer record. And two, the items that are on sales orders don't deduct no from the available quantity, right? Why then create sales orders.
Why Sales Orders Matter
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Dan DeLong: So one, they needed some something between a quote or an estimate, a wishlist to, to a, for a promise to sell, right?
Rachel Dauchy: Yeah. Yeah. Because an invoice, if you jump straight to the invoice, it's really you're transferring ownership, like with that invoice. And so it makes sense to have a.
Dan DeLong: So
Rachel Dauchy: [00:28:00] you
Dan DeLong: have something in that happens.
Rachel Dauchy: Yeah.
Dan DeLong: And likely those gaps that are existing about available quantity and not showing?
I'm, I would I would assume that those, will fill. Fill, they'll fill the gaps. As enough feedback is given, it's because again, people are gonna see these and go why do I even use this? You do have some, you do have a couple extra reports when, you do have them so you have a sales order by item list report and the summary of open sales orders.
But really I think what.
Shipping Workflow Focus
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Dan DeLong: Where, QuickBooks in initial need, like the, priority that they needed to have is not just have a transaction between, an estimate and an invoice, but a lot of extra fields in here are revolving around shipping. So that is, I think, where this is coming from.
Because to your point, the, [00:29:00] transfer of. The, of ownership of the, item really doesn't happen until it's built. And that's where an invoice will come in.
So a sales order, is, really necessary for, shipping. You don't ship it.
Rachel Dauchy: It's basically saying, I pulled it off the shelf.
Dan DeLong: Exactly,
Rachel Dauchy: and you gotta have that. It's really important, especially in the warehouse or the garage or the office or wherever you're holding your stuff. Some of my people are a little smaller and they don't necessarily have a warehouse, but yeah, it's really important for that.
Dan DeLong: Yeah.
Feedback and Reporting Tips
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Dan DeLong: So if you, if you see the ability to, create a sales order in QuickBooks, give that feedback right on the sales order, because that will go to the folks that, that need need to address this sort of thing instead of going into some larger bucket and then having to [00:30:00] find their way to the folks working on the sales orders, right?
So it's there, but. It's there, right? Yeah. That's about it.
Item Receipts Explained
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Dan DeLong: So the next thing we wanna talk about is, item receipts. Now this is something that was just like sales orders. It just never existed in QuickBooks Online. And an item receipt its purpose in general is to tell QuickBooks.
I've received the items. But I have not received the bill for set items. So I've, actually, got them, I've, I now have the ownership of these items or they're on hand, but somebody didn't send me a bill. And how often does that typically happen?
Rachel Dauchy: All the time. And it's so important, again, part of just the inventory accounting process.[00:31:00]
Dan DeLong: Yeah.
Receiving vs Billing Scenarios
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Dan DeLong: Either the scenarios that I've seen is that either they have to prepay for their, inventory and then they it, takes a while for that shipment to, to arrive and then they have to deal with that or, they've received it, they receive it, and then they get a bill at some point sometime in the, later in, in the later.
At, some later time. And typically there's a difference. Sometimes, a lot of times there's a difference between what was billed and what was actually received. Maybe some items were damaged or the pricing the costing might might, change a little bit. So that's where you really want to keep those items, those events separate, right?
You want to have an item receipt to maintain. The quantity on hand as to when you, received it, and then you [00:32:00] wanna ha you wanna keep your billing, separate, as separate events, right? Because Yep. Under normal circumstances, right? Even in, QuickBooks Desktop, if you didn't have this enhanced receiving turned on, I wanted to bring up a, an item receipt, and I never got to it.
It's gonna be here.
Rachel Dauchy: And then as somebody that's worked in these kind of operations forever, you just want as much historical documentation as you can. Because you're always going back and looking at stuff. And if you look back and you're like, oh, okay, here's an invoice.
Sometimes you have to do some digging and figure it out. If you have an a purchase order, an item receipt. And then basically saying I've received it and then a bill, and then a bill payment. It's just, in my opinion, the more information you have, the better.
Dan DeLong: And where are they?[00:33:00]
Where'd they go? I'm honey around for it, so then go,
Rachel Dauchy: maybe you don't have it turned on.
Dan DeLong: I, I, yeah I checked before you to do, yeah, I've got item receipts. Turned on.
Inventory Receiving Setting
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Dan DeLong: All right, so while we're here, let's talk about this. There's this new option in here. I noticed that inventory receiving method, right?
And you can see I've turned it on to item receipts and you notice that this setting can't be changed. So this is very important to, understand, especially for the accountants out there, when they're not just when they're dealing with inventory, but when they're dealing with a client who has turned this on.
Bills that affect items are going to be affected, maybe a little bit confusing, and [00:34:00] we wanna make sure that people understand understand that when you have the the inventory receiving method, right? The, choice here is either the, inventory receiving method will either be on a bill or a, or an item receipt.
And if you choose item receipts, then item receipts are always gonna be your source of truth for when you've received anything, right? Even if you've received the item and the bill at the same time. You still need to enter an item receipt in order to do that, right? Because here's the thing, if we, let me just resize this here, okay?
Bill Posting to Offset
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Dan DeLong: We go in, let's let's create a bill for some inventory items, right? So we're gonna choose our, vendor, named vendor,[00:35:00]
hang on. All right. Let's find, oh, I'm in categories, which of course, right items down here. Okay. Oh, it already populated a whole bunch, of, items here based off of vendor already being selected, so I'm gonna save this. All right. Let's take a look at the. Transaction journal, which is the debits and credits behind this transaction.
And we'll wait for it to show Spinny. Spinny, spinny.
All right. So even though I have my accounting set up individually for the items to go to inventory. Inventory asset. You'll see here the account that all of these items are going to is inventory [00:36:00] offset, right? So that's because the item receipt is what's actually recording the quantity on hand. So let's take a look here.
This beach mint. 10 count gum. So if I go in and I look at that item, so let's go to my product and services.
10 count. Let's find that item. That was a non-inventory item. Okay. Oh gosh. Let's see. All right, let me go back here.
Where's my history here? Let's go to the bill.
Bring this up.
Let's take a look at this. Oh, for some reason it's the actual shirt, [00:37:00] my item name, and descriptions are all messed up here. So, t-shirt a, black. So let's take a look at that.
Find it.
All right. Take a look at these items. All inventory asset account is inventory asset, right? There's sales of product income. It's the income account, cost of good sold. It's cost of good sold. So there's no mention on the item as far as inventory offset. And if I run, I just wanna double check this bill here.
This is, I hate when you can't see the whole column. There we go. Because this is actually the 12 count, one. So if I go here to this one, I run a report on it.[00:38:00]
I didn't, did I save it? I didn't, yes, I did on the report on that.
There's nothing in here that that shows that this item has been received, for this, item. Because. It's all being handled as far as the quantity is concerned based off of the item receipt. And we, so it puts it
Rachel Dauchy: in that inventory suspense account, and then when it actually arrives, it clears up the suspense.
Dan DeLong: So that's something to keep in mind that when you're doing inventory with item receipts, which for some reason I cannot.
Finding and Using Item Receipts
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Dan DeLong: I don't know where I go to create an item receipt if I [00:39:00] can't see.
Rachel Dauchy: Yeah, the thanks into it. Yeah. I can never find anything either.
Dan DeLong: So I, I can see it from here.
Create an item receipt. So,
Rachel Dauchy: that's put something on your balance sheet.
Dan DeLong: What's that?
Rachel Dauchy: It's still gonna put something on your balance sheet,
Dan DeLong: right? So here's a, an item receipt that I entered in before.
Rachel Dauchy: It's really stock and transit is really what it is,
Dan DeLong: Right. So I'm gonna save this here.
This date was 2 27 26, and this is the exact same item that we were just looking at. So if I refresh this report.
All right. Let me just make sure that was the same item that I was looking at.
That's the 12 count. Here we [00:40:00] go. Close that. Oh, there they're, and we go.
Oh, it was this, there was a size issue. Okay, so hold on a second. Let's go.
All right, let's just double check my items that are on here.
Large. Okay, so that's L 12 count. Okay, L where are you? Oh my goodness.
Where is it? Okay,
I cannot copy. Okay. There we go. Grab, make sure we're looking at the right one here. [00:41:00] Do, Okay, lemme do this one. Edit. Alright, so again, we're just gonna take a look here that we don't have
Rachel Dauchy: you gaming convention for your sample T-shirt company is very difficult.
Dan DeLong: I know, and it has to do with, it's, because I do all these demo things and I,
Rachel Dauchy: this is why a lot of clothing companies will call it like this shoe model is the Jen or the
Dan DeLong: Alyssa,
Rachel Dauchy: because it's, you can search it your system better.
Dan DeLong: Okay. So here is the item receipt that's, recorded. And you'll see down here that there's now a section now for [00:42:00] inventory offset. Yeah. Which, is where the bills come in, right? Yes.
Irreversible Setting Pitfalls
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Dan DeLong: So once you've made that change to from item receipt recording the quantity on hand or.
Or the bill, then everything that has to deal with items coming in has to start with an item receipt. And you can't
Rachel Dauchy: go back that's it. Like multicurrency. It's turned on. It's on,
Dan DeLong: right? Once, once you turn it on, you can't turn it off.
Rachel Dauchy: What if you turn off inventory tracking?
Dan DeLong: I don't think it's well.
It's gonna just hide those functions. Right?
Rachel Dauchy: But that history of those will be there.
Dan DeLong: Yeah. Actually, since this is a demo account, let's just see since that's a good question. What if you just turn off?
Rachel Dauchy: I don't think we can turn it off because you got a zero out your inventory first
Dan DeLong: yeah.
Yeah. So if I turn that off, it'll it'll allow me to save it.[00:43:00]
Oh yeah,
Rachel Dauchy: yeah.
Dan DeLong: Something's not quite right.
Rachel Dauchy: What have learned enough from you to tell you? No, there's gotta be zero.
Dan DeLong: So they must be a zero before you turn them. You inactivate them. So you have to zero out your inventory, which is another feature of being able to do physical counts now in inside of QuickBooks.
So when you're on. Your, inventory setting, you'll see under the Moore menu. This one doesn't have it for some reason because I'm in A-Q-B-O-A free account demo account as opposed to a real, qBO subscription that doesn't, that that is using it. But there's under more, there's gonna be physical counts and allow you to take add items and zero them out in, bulk.
But you could also do that by [00:44:00] adding multiple items and then just using,
Rachel Dauchy: batch
Dan DeLong: action. Batch action. There we go. Adjust the quantity and then you could zero it out from there if need be, right? But the main thing that we wanna drive home here today is that inventory item receipts.
Once that is turned on in settings, all items that have to do that. R receiving of items have to go through an item receipt first and then the bill, even if it happens on the same day, because you're gonna have this inventory exp expense suspense account, inventory offset that bills with inventory items we'll automatically go to.
You
Rachel Dauchy: know what I'm thinking?
I'm thinking that we'll probably get some more work because of [00:45:00] this. 'cause people will this up.
Dan DeLong: Yeah. And,
Rachel Dauchy: oh gosh, that's
Dan DeLong: horrible. And the and, likely, the, answer from, QuickBooks when somebody has turned it on without without.
Realizing the ramifications of that because they may turn it on and then be like that only equates to one specific situation. Yeah. And majority of my other situations, yeah, don't require that. But now I've created more work for myself because I have to create an item receipt first and then a bill.
Against the item receipts.
Rachel Dauchy: Oh yeah. And then ps that's gonna be another reconcilable clearing account that probably is not gonna wash out at the end of the month. And then what is still sitting there is going to be really what is in transit. And people won't understand that concept.
So I just see lots [00:46:00] of confusion.
Dan DeLong: Yeah.
Rachel Dauchy: Down the, pike.
FIFO vs Moving Average
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Dan DeLong: And then one other, note is that QuickBooks Online has always been first in, first out when it comes to inventory tracking, which is one of the weird things is that you have this. Fundamental perpetual inventory of the, things that you can do and the, and a lot of things that you can't do with tracking your inventory.
But then first and first out is the, costing method which is the pretty is, it's more in an of an advanced tracking mechanism. Yeah. Not always
Rachel Dauchy: appropriate for every single situation either.
Dan DeLong: But now there is, moving average cost or weighted average which is typical what it what you see inside of QuickBooks Desktop.
Rachel Dauchy: Yeah.
Dan DeLong: With, which I
Rachel Dauchy: think is more appropriate and with [00:47:00] fluctuating costs.
Dan DeLong: Yeah. And and the thing, the problem was right, if you're moving a client from desktop to QuickBooks online and they are tracking their inventory inside of QuickBooks. They're forced to move to first in, first out.
Yeah. Which now, if they were not using first in, first out in desktop and they are now forced to use first in, first out in QuickBooks Online, that's now a different cost calculation method that they need to tell the IRS about.
Rachel Dauchy: Yeah. And and did and I think you've, experienced this a whole bunch, doesn't it?
Go back and revalue the inventory.
Dan DeLong: Depending on the date that you choose as your start date
Right,
It may cause a, whole havoc of, issues when it comes to the cost that move, that weighted average figured out [00:48:00] versus first in, first out.
Rachel Dauchy: And that
Dan DeLong: could be
Rachel Dauchy: a wildly different, especially in today's.
Day.
Dan DeLong: So now what's supposed to happen is that when you have a a desktop file that is moving from QuickBooks Desktop to QuickBooks Online and they have inventory items, it should give you a preference to choose. Do you want to go to moving average cost or or stay at mo moving average cost or move to fi IFO?
I have yet to see that inside of my QuickBooks desktop. My guess is I need to make sure I do a, an update inside of my QuickBooks, but I have seen it inside of QuickBooks online where there's an option to change.
Rachel Dauchy: Oh, okay. Yeah, because I was gonna say, leave that to the migration experts.
Dan DeLong: Yeah. So after the migration, you can go in and change your, cost calculation from
Rachel Dauchy: Where do you [00:49:00] do that? In QBO o Is there a way to, yeah. And then can somebody do that? Like just, let's say they haven't migrated, can they toggle back and forth between those two? Yeah.
Dan DeLong: Yeah. It should be, in here.
And I didn't see it. Yeah,
Rachel Dauchy: I haven't seen it
Dan DeLong: looking in here. And it's not here
Rachel Dauchy: advanced.
Dan DeLong: Maybe it's an, you're right. Maybe it's a, that would be a more advanced thing. Nope.
Rachel Dauchy: Maybe it's a myth.
Dan DeLong: I've, seen it but just not in my, Where I'm looking, right? I've seen it in the past. So I'll find it and I'll put it in the comments of where, it actually is.
But those are the, latest in inventory enhancements inside of QuickBooks online. I'm trying to s. Nope, I'm trying to stop this sharing. I turn it off.
Wrap Up and Next Episode
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Rachel Dauchy: I think it's cool [00:50:00] that they've done these enhancements. I, at the end of the day, I think like my final assessment is, it's, my opinion still doesn't change.
You still can't do any of the things that I originally mentioned in the very beginning. If you're kidding at all, this doesn't change that. I would still say. Buying items, reselling items, still doing the same things that you and I have talked about before. But this gives you a couple extra things in the inventory workflow that I think would be super helpful if you are managing your inventory and QBO and if you're qualified to do that with the various.
Things that we've talked about, this can definitely give, so for me, like it's all about what can I see when I go back historically and look for things, right? I like that there's an item receipt and I like that there's a sales order and I like these things added, so yay
Dan DeLong: they're there. [00:51:00] But understand that this is an entry point.
Rachel Dauchy: Yeah,
Dan DeLong: it probably does not have all of the. End-to-end workflows fleshed out. So definitely make sure that if you are seeing these things in use, understand that there are some, pitfalls that could come with that. And especially with the enhanced item receiving or the item receipts.
Tracking the accounting for the receipt of the items. That will play a big big factor in how things are, showing up on the financial picture of the items. Let us know what you think, put in the comments when you see this. And also let us know if if the stream quality was okay this time.
And we'll we will, we'll see you next time on the workshop [00:52:00] Wednesday. We'll have so Rachel, won't, be with us next week, but filling in is our, friend Chloe from Relay where we'll be talking about money movement, in relay. So money coming in and money going out.
So we'll be talking about those those options in and outside of QuickBooks. So we'll see you next time on the workshop Wednesday.
[00:53:00]
