10Mar 2011 by Charlie Russell

QuickBooks Tip – Understanding QuickBooks Inventory Cost

Be A Better Bookkeeper, From Our Guest Bloggers
If you are using QuickBooks to manage your inventory, you need to understand how QuickBooks deals with the cost of inventory items. Unfortunately, the term “cost” is used in several different ways, and it can get confusing. Here is a quick rundown of how QuickBooks handles things. I’ll focus on Inventory Part items, which are the true “inventory” items in QuickBooks, with a little detour to talk about Inventory Assembly items. Cost Fields in QuickBooks If you look at an Inventory Part item, you will see that there are two cost fields. Cost, on the left, is a "reference" field. That is, it doesn't have any direct bearing on the valuation of your inventory, the cost of your inventory in your inventory asset account. I wish they had another name,…
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06Jul 2010 by Nancy Smyth

QuickBooks Question – Inventory for Contractors

Questions from our readers, QuickBooks Add-Ons
A reader asked the following question: We are a small contractor in San Diego and we are wondering how we get around having to always do an inventory adjustment to get our purchases to the correct COGS account?  We have (2) departments but they are both doing construction projects:  Service dept does smaller installs and Contracts dept does the bigger jobs so I have been doing a JE to move the material from the Contracts material COGS account to the service COGS account. Is there an add-on for QB Enterprise 8 that we could use? Thank you so much for your website/blog. I've been reading it faithfully every day! ____________________________________________________________________ There are several inventory add-ons for QuickBooks Pro, Premier and Enterprise; check out these 3rd party add-ons at the Intuit…
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08Jun 2010 by Nancy Smyth

QuickBooks Tip – Determing Cost of Goods Sold

Job Costing Tips, QuickBooks Setup & Cleanup
Question: How do I determine the Cost of Goods Sold for an item? Answer: I tell my clients that Cost of Goods Sold (COGS) is any cost incurred that directly relates to getting the sold goods out the door. I have them ask the question "Would you have this expense if you hadn't made the sale?" Typical examples of COGS are product purchased for resale, subcontractors or vendors you hire specifically for preparing a product for sale, shipping materials like packaging, freight costs of receiving the resale product and shipping the product to your customers, payroll/labor costs of your employees who are directly related to preparing the goods to be sold or shipped out (would you have hired them if you didn't have the product to sell?). Costs that are…
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