In QuickBooks Online, items are the products and services a business buys and sells. Users enter and track items in QuickBooks so they can quickly add them to invoices and other sales forms.
Items appear as lines on sales forms. Each unique item gets a line with its name, description, quantity, and cost per item. That’s why items are sometimes called “line items.”
Learn more about how QuickBooks Online users create and sell items.
Learn about item types in QuickBooks Online
The item type determines if and how an item is tracked in QuickBooks. There are four basic item types: inventory, non-inventory, services, and bundles.
|Inventory||Inventory items are products a business sells and wants to track the quantity of. Typically, a business creates or buys these items, holds them “in stock,” and then sells them to customers. QuickBooks tracks inventory so users can quickly check the quantity on hand, the cost of goods sold, and the inventory’s total value.|
Non-inventory items are products a business sells, but doesn’t track the quantity of.
In general, businesses don’t need to track quantities for non-inventory items. For example, office supplies and materials for making products. Non-inventory items may be materials used for a specific job, or their cost is combined with other fees.
Tip: The difference between inventory and non-inventory items can be confusing. Each item type is connected to specific accounts and shows up on financial reports differently. Learn more about inventory and non-inventory items.
Service items are for tracking services a business provides to customers.
For example, labor, consulting hours, and professional fees.
For example, you can set up a bundle with 5 apples, 5 oranges, and 5 pineapples and call it a “fruit basket” bundle. The bundle becomes a single item that contains other items.
Learn what makes inventory items unique
Inventory items the products a business plans to sell and tracks the quantity of.
Small businesses with inventories need to know:
Certain versions of QuickBooks Online come with inventory tracking and management features.
Inventory items are a specific item type in QuickBooks. Businesses sometimes sell items they don’t track quantities for — these are non-inventory type items. This distinction is important since the item type decides if items are tracked and how the accounting works.
QuickBooks calculates the cost of producing and keeping items in stock. This is known as the cost of goods sold. This calculation lets customers know the current actual value of their inventory since it includes.
If you add inventory type items to sales forms, purchase orders, and refund transactions, QuickBooks automatically adjusts the quantity on-hand when they’re bought or sold.
QuickBooks inventory management offers several features:
|What’s supported||What’s not supported|
|FIFO inventory accounting||LIFO or Average Cost inventory accounting|
|Tracking quantity on hand||Tracking individual items, for example, by serial number|
|Up to four levels of item categories||Tracking by different stock locations|
|Taxable status of items|
|Price and cost|
Learn about inventory accounts
In QuickBooks Online, inventory items need to be linked to three separate accounts:
Asset account: Asset accounts track the value of inventory based on the quantity on hand. This account tracks the following:
Income account: Income accounts track the revenue (i.e. profit) made from the sale of the inventory item.
Expense account: There’s a special kind of expense account, known as the cost of goods sold (COGS) account, that tracks the cost associated with either purchasing an item from a vendor or producing it in-house.
Buying inventory from vendors
Businesses either create the products they sell, or buy them from vendors.
Once they receive the products from the vendor, as long as the user recorded the transaction as a bill or expense in QuickBooks, QuickBooks automatically updates the inventory item’s quantity on hand.
This also records the purchase in the inventory asset account.
Selling items to customers
In QuickBooks, businesses record sales with either an invoice or a sales receipt.
Businesses need to know the current quantity on hand so they don’t sell products they don’t actually have. Services and non-inventory items usually aren’t recorded the same way.
How this relates to app development
Many apps need to create and get information about product and service items so users can add them to invoices and transactions. When you’re developing your app, think about what items your app needs and what already exists in an end-users QuickBooks Online company.
Additionally, items are always connected to multiple accounts. This lets businesses track the value of items, how much it costs to purchase or produce them, and how much money they make from sales.
As a developer, you can create and query items via the item entity.
Implement inventory features for your app
Before you get too far into development, set up the basic inventory implementation so you have pre-created entities to use.
Once you set up the implementation, you can start using the Item entity to create products and services.