QuickBooks provides you with a powerful, and time saving tool within your items list, which is often under utilized and often misunderstood — the QuickBooks Group Item.
5 Reasons To Use QuickBooks Group Items:
- Creating and using Group Items is useful for quickly entering a group of individual items that you have already set up as single items in your Item List.
- Group Items are versatile – you can choose to print – or – not to print the items within the group, meaning you can track more detail than your customer needs to see.
- Group Items ensure that you don’t “leave something out” – which means lost dollars on your part.
- Group Items speed up the creation of Estimates and Invoices – imagine being able to pull in 19 items with a single click of a mouse.
- Group Items allow you to bridge the difference in units of measure used to buy and sell products or materials.
“Back in the day”, as my son-in-law would say, before QuickBooks had a Unit of Measure option – I think it was introduced with QuickBooks 2007 – we had to rely on QuickBooks group items to perform Unit of Measure calculations.
Using Group Items to bridge differences in units of measure used to buy and sell materials.
Suppose you are an Electrician and buy wire in spools of 1,000 feet, but when you invoice your customers you do so by the foot. By using group items we could effectively bridge this difference by following the steps below.
1. Verify that Inventory & Purchase Orders are active, by choosing Edit, Preferences, Purchases & Vendors, Company Preferences
2. Add a Sub-Account to your main Inventory Asset Account on your Chart of Accounts called Wire
3. Create an Inventory Part item for a foot of wire, called “Feet of Wire” and assign it to the “Wire” Account from your Chart of Accounts
4. Create a Group Item called “Spool of Wire”
5. Add the “Feet of Wire” Inventory Item with quantity of 1000
How we used these items once they were created:
When you buy the wire, use the “Spool of Wire” Group Item on your Purchase Orders, your checks, or bills and QuickBooks will add 1000 feet of wire to Inventory.
When you sell the wire, use the “Feet of Wire” Inventory Part Item on your Estimates, Sales Orders, or Invoices and QuickBooks will remove those amounts of wire from Inventory.
Would you believe that even though QuickBooks now comes with a Unit of Measure ability, there are still some people that prefer this method?
How many of you remember this method of creating a Unit of Measure using Group Items?
QuickBooks provides you with a powerful, and time saving tool within your items list, which is often under utilized and often misunderstood — the QuickBooks Group Item.
5 Reasons To Use QuickBooks Group Items:
- Creating and using Group Items is useful for quickly entering a group of individual items that you have already set up as single items in your Item List.
- Group Items are versatile – you can choose to print – or – not to print the items within the group, meaning you can track more detail than your customer needs to see.
- Group Items ensure that you don’t “leave something out” – which means lost dollars on your part.
- Group Items speed up the creation of Estimates and Invoices – imagine being able to pull in 19 items with a single click of a mouse.
- Group Items allow you to bridge the difference in units of measure used to buy and sell products or materials.
The following example deals with the CSI MasterFormat Cost Code section 03.20.00 for Concrete Reinforcing.
How to create a Group Item
In the QuickBooks Item list, you’ll want to have the individual items set up (03.21.00 through 03.24.00) as double-sided items.
Once these items are in place.
From the Item List, click the Item button at the bottom of the list window -> select New. From the New Item window choose Group from the Type drop down menu. In the Group Name/Number type in 02.20.00 Concrete Reinforcing, in the Item column select each of the individual components on the Concrete Reinforcing section. I’ve even added an Subtotal and Overhead & Profit item to the group. My group now contains a total of 10 line items.
IF you want your customer to see all 10 lines within the group, click into and place a check in the “Print items in group” option. IF you do not want your customer to see all 10 line items, leave this option unchecked and they will see ONLY 03.20.00 Concrete Reinforcing, while YOU still see all the detail.
How to Use the Group Item After It’s Created
Open an Estimate or Invoice form, click into the Item Column, find the Group Item and enter you cost amounts (enter costs ONLY if you are using an Overhead & Profit item within the group). As you enter the cost associated with each line item, QuickBooks calculates and updates the subtotal, overhead & profit (if the item is setup as a percentage), sales tax (if applicable), and Estimate total.
When you use the Item list for job costing (on vendor bills, checks, etc.) you would still job cost against the individual items in the item list.
Tomorrow, in Part 2, find out how to use Group Items to bridge differences in units of measure.
Using QuickBooks in the construction industry can be a daunting task.
There is not a lot of construction specific help available for QuickBooks users and the accounting professionals who support them.
That’s one of the reasons that we’ve decided to start a “QuickBooks for Contractors” Group on LinkedIn – please feel free to join us – http://www.linkedin.com/e/vgh/3105723/
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