Duff Accounting Solutions - Small Business Accounting Software Solutions

QuickBooks Online Manual
Items

Understanding Items
QuickBooks Pro items represent services and products you provide, things you buy, and discounts you offer. You use them when you create invoices, fill out checks, and create purchase orders, among other things.

While providing a quick means of data entry, items, more importantly, handle the behind-the-scenes accounting. When you create an item you link it to an account, when the item is used on a form it posts an entry to that account and another to the appropriate accounts receivable, accounts payable, checking, or other account.

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Item Types
QuickBooks provides ten different types of items to help you fill out sales and purchase forms quickly:

Service	Services you either charge for or purchase. Examples include specialized labor, consulting hours, and professional fees.
Other Charge	Miscellaneous charges which are not services, labor, materials, or parts. Examples include reimbursable expenses like copies, postage, and mileage.
Inventory	Use inventory part items to represent materials or parts you buy, track as inventory, and then resell. Through inventory part items, you can keep track of how many items remain in stock after a sale, how many items you have on order, your cost of goods sold, and the value of your inventory. Note that QuickBooks does not track inventory through the manufacturing process.
Non-inventory parts	Non-inventory parts can include the following products and goods: those purchased for a specific job and then charged for, those you sell but do not purchase, those you purchase but do not resell (for example, office supplies), those you purchase and resell but do not track as inventory.
Subtotal	Used on sales forms, a subtotal item adds up the amounts of the items above it, up to the last subtotal. You'll need to create a subtotal item if you ever want to apply a percentage discount or surcharge to several items.
Group	Fast entry of a group of individual items already on the Items list.
Discount	An amount to be subtracted from a total or subtotal.
Payment	Payment you received at the time you write an invoice. A payment item reduces the amount owed on an invoice.
Sales tax item	Calculating a single sales tax.
Sales tax group	Calculating two or more sales taxes grouped together and applied to the same sale.

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Creating Service Items
Service items can include professional fees or labor that you charge for or pay for. For example, you may charge clients for your consulting time, but pay for janitorial services.

From the "Lists" menu, choose "Items List".

From the "Item" menu button, choose "New".

In the "Type" field of the "New Item" window, choose "Service".

•	Note: You cannot change a service item to another item type once you have recorded the item.

Enter an item name or number in the "Item Name/Number" field.

•	What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

Use your mouse to check the "Sub-Item" checkbox, if you are creating this item to be a sub-item of another item you have already set up. Refer to "Creating Sub-Items" if you need further instruction about how to set these up.

Enter a description in the "Description" field. This description will display on the sales and purchase forms.

Enter a rate for the service in the "Rate" field. The amount can be either a flat fee or an hourly rate. Leave the field blank if this rate varies. If you purchase this service, enter the vendor's rate. If you sell this service, enter the rate you charge your customers.

(Sales only) If you don't charge sales tax for this item, select "Non-taxable" from the list.

For Quickbooks 2001, 2000, 1999:
(Sales only) If you don't charge sales tax for this item, clear the "Taxable" checkbox.

Click "Custom Fields" to fill in any custom fields that apply to this item.

10.

In the "Account" field, enter an income account for sales or an expense account for purchases.

11.

Click "Ok" to record the item and leave the "New Item" window, or "Next" to close this item and enter another.

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Creating an "Other Charge" Item for Reimbursable Charges

Like any Item you are setting up, from the "Lists" menu, choose "Items List".

Then from the "Item" menu button in the bottom left corner of the "Item List" window, choose "New".

In the "Type" field of the "New Item" window, choose "Other Charge".
Remember that once you create the item you will no longer be able to change the "type" you have assigned to that item.

Give the item name in the "Item Name" field. What you enter here will appear on the drop-down list of items when you are filling out a sales form, purchase order, or entering expenses on a check. Enter a name that will help you distinguish this item from all the others on the list.

Check the "Sub-Item Of" checkbox if you are creating this item to be a sub-item of another item you have already created. Refer to "Creating Sub-Items" for more information.

Click on the "This is a reimbursable charge" checkbox so that an "X" appears in the box.

Fill in the "Purchase Information" fields.
Typically, small companies will be using this feature to enter items such as mileage, postage, and copies. In this case you will not be marking the item up, so all the Purchase fields can be left blank except for the "Expense Account" field. To fill in this field you should choose "Reimbursable Expense- Income Account". If you purchase parts or other items that you then resell to your customer at a profit to your company, you can use the following instructions to fill out the window properly.

A.	(Optional) Enter a description in the "Description on Purchase Transactions" field. What you enter here appears in the "Description" column of checks, bills, credit

B.	Hit the tab key to move to the next field.

C.	In the "Cost" field, enter the cost you expect to pay when you buy or order this item. You can change the cost at the time you buy or order the item.

D.	Enter the Expense Account you would apply this to when you receive a bill from the vendor in the "Expense Account" field.

(Optional) Enter a description in the "Description on Purchase Transactions". What you enter here appears in the "Description" column of the purchase form when you buy the item. Your description may be up to three lines in length. If you need to, you can edit the description when you are filling out a sales form.

F.	(Optional) In the "Preferred Vendor" field, choose or enter the name of your preferred vendor for this item.

Fill in the "Sales Information" fields. As mentioned in step 6, small companies typically will be using this feature to enter items such as mileage, postage, and copies. In this case you will not be marking the item up, so all the "Sales" fields can be left blank except for the "Income Account" field. To fill in this field you should choose "Reimbursable Expense- Income Account", which is the same account you entered in step 6 above. If you purchase parts or other items that you then resell to your customer at a profit to your company, you can use the following instructions to fill out the window properly.

(Optional) Enter a description in the "Description on Sales Transactions". What you enter here appears in the "Description" column of the sales form when you sell the item. Your description may be up to three lines in length. If you need to, you can edit the description when you are filling out a sales form.

B.	In the "Sales Price" field, enter the sales price you want to charge your customers for the item. This is typically a number greater than your purchase cost. If the sales price varies, leave this field blank. (You'll enter the price directly on the sales form.)

If this item is taxable, select the tax category from the drop down list. If it is not taxable, choose "Non Taxable Sales" from the same list.

For Quickbooks 2001, 2000, 1999:
In the "Taxable" field, click this checkbox so an "X" appears in the box, if you charge sales tax for the item. When you make a taxable sale, QuickBooks calculates tax on the item.

D.	In the "Income Account", enter the income account that you want to register the receipt of payment that you will receive when you bill your customer for the cost.

Click "Custom Fields" to fill in or create any custom fields so you can enter more information associated with this account.

10.

Click "Ok" to record the item.

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Creating Inventory Items
Inventory tracking must be turned on for you to perform this function. It is important to note that you should not create separate inventory part items for sales and purchases. You must use the same inventory part item on both sales forms and purchase orders to keep the inventory accurate.

From the "Lists" menu, choose "Items List".

From the "Item" menu button at the bottom of the window, choose "New".

From the "Type" field drop-down list, choose "Inventory Part".

Enter an item name or number in the "Item Name" field. What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

If this item will be a subitem of an existing item, select the "Subitem of" checkbox and use the drop-down list specify the other item's name. Refer to "Creating Sub-Items" for more information.

Fill in the Purchase Information fields.

•	"Description on Purchase Transactions" - What you enter here appears in the "Description" column of checks, bills, credit card charges, and item receipts when you reorder the item. If you need to, you can edit the description when you are filling out a purchase order.

•	"Cost" - Enter the cost you expect to pay when you order or buy this item. You can change the cost at the time you purchase the item.

•	"COGS Account" - Choose a different cost of goods sold account if you don't want to use the preset account.

•	"Preferred Vendor" - (Optional) Select or enter the name of your preferred vendor for this item. QuickBooks displays the preferred vendor on the stock status report and the physical inventory worksheet.

Fill in the Sales Information fields for information you show to customers.

•	"Description on Sales Transactions" - What you enter here appears in the "Description" column of the sales form when you sell the item. If you need to, you can edit the description when you are filling out a sales form.

•	"Sales Price" - Enter your sales price for the item. If your sales price varies, leave the field blank.

•	"Tax Code"- select the tax code which applies to this item For Quickbooks 2001, 2000, 1999: "Taxable" - Select this checkbox if you charge sales tax for the item. When you make a taxable sale, QuickBooks calculates tax on the item. This checkbox will not appear if sales tax is not set up.

•	"Income Account" - Choose an income account to track the income you earn from sales of this item.

Fill in the "Inventory Information" fields for easy reordering of stock.

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"Asset Account " - Choose a different inventory asset account if you don't want to use the preset account. QuickBooks uses this account to track the current value of your inventory. If you use the same account for all your inventory part items, the balance of this account shows the total value of your inventory at any one time.

•	"Reorder Point" - Enter the quantity at which you want QuickBooks to remind you to reorder this item. This information also appears on the stock status report.

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"Qty on Hand" and "Total Value" - If this is an item you already have in stock, enter the quantity on hand and value as of the last time you measured your inventory. Be sure to enter any sales or purchases of the item that occurred between the date you measured your inventory and today to ensure that QuickBooks' record of your quantity on hand for the item is accurate. If this is a new item that you are adding to your inventory, leave the "Quantity on Hand" and "Total Value" at zero.

•	"As of (date)" - If this is an item you are converting to an inventory part item from a non-inventory part or other charge item, the date you enter must be a date that is after the date of the last transaction that uses the item.

Click "Custom Fields" to fill in or define custom fields for this item.

10.

Record the item by clicking "Next" if you would like to enter another item, or click "OK" to record the item and close the window.

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Creating Non-Inventory Part Items

1.	From the "Lists" menu, choose "Items List".
2.	From the "Item" menu button, choose "New".
3.	In the "Type" field of the "New Item" window, choose "Non-inventory part".
4.	Enter an item name or number in the "Item Name" field. What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.
5.	If this item is a subitem of an existing non-inventory item, select the "Subitem of" checkbox and specify the parent item's name. See "Creating Subitems" for more instructions about creating sub-items.
6.	Enter a description in the "Description" field. This description will display on the sales and purchase forms.
7.	Enter a rate for the item in the "Price" field.
8.	Select the tax code which applies to this item For Quickbooks 2001, 2000, 1999: If you do not charge sales tax for this item, clear the "Taxable" checkbox so a checkmark does not appear within the box.
9.	Click "Custom Fields" to fill in any custom fields that apply to this item.
10.	In the "Account" field, enter an income account for sales and an expense account for purchases.
11.	Click "Next" to record the item and enter another one. Click "OK" to record the item and close the window.

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Creating Subtotal Items
Because QuickBooks calculates percentages only on the line above, you need to subtotal the items before entering a discount item that calculates on a percentage basis.

1.	From the "Lists" menu, choose "Items List".
2.	From the "Item" menu button, choose "New".
3.	From the "Type" drop-down list, choose "Subtotal".
4.	Enter an item name in the "Item Name" field, such as "Subtotal".
5.	Enter the description that you want QuickBooks to put on your sales forms when you apply the subtotal into the "Description" field.
6.	6. Click "Ok" or "Next" to record the item.

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Creating Sub-Items
Subitems let you create a hierarchy of items so you can group information about similar items in sales reports and graphs. Subitems are purely for your own convenience. They look the same as items on sales forms and purchase orders.

1.	Create the "parent" item (that is, the item that will have subitems) first. If you won't be using the parent item on invoices and sales forms, you can leave the rate or price of the parent item at zero. You still have to assign an account to the item; however. QuickBooks requires an account even if you don't plan to sell the item.
2.	Create the subitems: An example of a service sub-item might be "consulting" as the "parent" item, then "framework consulting", or "drafting consulting" as the sub-items. Begin as if you were setting up this item in the usual fashion. Each subitem must be the same "Type" as its parent item. To make the item a subitem, select the "Subitem of" checkbox and choose the name of the parent item.
3.	Once you have clicked the checkbox you will be able to see and use the drop-down list in the "Sub-Item" field of the items you have already created. Highlight the item that you want the item you are creating now to be a sub-item of.
4.	After completing all the information according to the instructions relevant to the type of item it is, click "Ok" or "Next" to record the item.

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Creating Group Items
If you often enter the same group of items when you record a sale or purchase, you can set up the items as a group item. Instead of entering each item individually, when you fill out a form, you enter the name of the group item. QuickBooks then fills in the details for the items in the group.

Group items let you track the items you sell in greater detail. For example, a construction firm that remodels houses could set up a group item that lists the significant components of a remodeling job: lumber, carpentry hours, markup, etc. Sales reports for the company would then show income broken down by each component instead of a single lump sum for all remodeling jobs.

If you need to track a lot of detail about your items but you also want to give your customers simple, uncluttered invoices, you can use group items to do both. You can set up a group item so that the printed version of an invoice reduces a group item to a single line item and one amount. Yet when you view the invoice on your screen, you see a separate line entry and amount for each item in the group.

Group items also give you a way to enter a great amount of line item detail quickly. On a sales or purchase form, all you have to do is enter the name of the group item and QuickBooks fills in all the details about the items in the group for you.

1.	From the "Lists" menu, choose "Items List".
2.	From the "Item" menu button, choose "New".
3.	From the "Type" drop-down list, choose "Group".
4.	In the "Group Name/Number" field, enter a name or number for the group item.
5.	Enter a description of the group item in the "Description" field. This description will appear on sales forms.
6.	(Optional) Select the "Print items in group" checkbox if you want your customers to see a list of the individual items and their amounts on your printed forms. Leave this checkbox clear if you don't want the details of the group to appear on your printed forms. (You'll still see the details when you view the form onscreen.)
7.	In the "Item" column, select the items that you want to include in this group by using the drop-down list of items that are already set up.
8.	In the "Qty" column, enter the quantity you want QuickBooks to enter for each individual item when you use the group item on a form. If you do not enter quantities, QuickBooks assumes that the quantity of each item is 1. You can always change the quantities when you enter a sale or purchase.
9.	Click "Custom Fields" to fill in any custom fields that apply to this item.
10.	Record the item by clicking "Next" or "OK".

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Creating Discount Items
A discount item applies a discount either a % or fixed amount to the preceding line on the sales form. You do not need a discount item for discounts you give for early payment. You can have QuickBooks calculate these discounts for you when you receive payments from customers. If you are applying the discount to more than one item, you must first use a subtotal item and then apply the discount to the subtotal.

1.	From the "Lists" menu, choose "Items List".
2.	From the "Item" menu button, choose "New".
3.	In the "Type" field of the "New Item" window, choose "Discount".
4.	Enter an item name, such as "Discount" in the "Item Name" field.
5.	Enter the description in the "Description" field that you want QuickBooks to put on your sales forms when you apply the discount.
6.	Enter the discount amount or percentage in the "Amount or %" field: If the discount is a percentage, include a % sign. For example, 5% tells QuickBooks to multiply the previous line by .05. Ifyour discount amounts vary, you may want to leave the Amount field blank and enter the amount directly on your sales forms.
7.	Enter the account you use to track discounts you give to customers. You can use either an expense account or an income account. When an income account tracks discounts on sales, the account is often called a "contra-income" account.
8.	Select the tax code which applies to this item. For Quickbooks 2001, 2000, 1999: To reduce the tax, select the "Apply discount before sales tax" checkbox so a checkmark appears in the box. This causes QuickBooks to include the discount when it calculates tax on a sale.
9.	Record the item by clicking "Next" or "OK".

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Creating Payment Items
A payment item subtracts the amount of a customer payment from the total amount of an invoice or statement. You need a payment item when you receive a partial payment toward the amount of an invoice or statement at or before the time you create the invoice or statement.

If you receive full payment at the time of the sale, use a sales receipt form instead of an invoice with a payment item.

From the "Lists" menu, choose "Items List".

From the "Item" menu button, choose "New".

From the "Type" drop-down list, choose "Payment".

Enter an item name, such as "Pmt by check" or "Pmt by cash" in the "Item Name" field.

Enter the description that you want QuickBooks to put on your sales forms when you use the payment item into the "Description" field.

From the "Payment Method" drop-down list, choose the appropriate method.

•	If you choose a payment method, you can group the money you receive by payment method when you deposit it (all checks in one deposit, all American Express charges in another deposit, etc.). Simply create a separate payment item for each payment method your customers use.

Indicate how you want QuickBooks to deposit customer payments: If you want to group it with other payments to be deposited later, click "Group with other undeposited funds."
If you want it deposited directly to a bank account, click "Deposit To" and enter the name of the bank account where you would like QuickBooks to deposit the payment.

Record the item by clicking "OK" or "Next".

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Creating Tax Items
Use a tax item on your sales forms to calculate the sales tax on a sale or to identify non-taxable items. A tax item represents a single tax that you collect at a specified rate and pay to a single agency.

From the "Lists" menu, choose "Items List".

From the "Item" menu button, choose "New".

From the "Type" drop-down list, select "Sales Tax Item".

Enter a tax name in the "Tax Name" field.

Enter a description in the "Description" field that will describe this sales tax on your sales forms.

•	The description prints on your sales forms after the final line item. You cannot edit it on the forms themselves. If you want to edit sales tax, you will need to edit the tax, as you would edit an item.

Enter the tax rate in the "Rate" field. QuickBooks assumes the rate is a percentage. For example, enter 7.25 if the rate is 7.25%.

Enter the tax agency to which you pay the tax in the "Tax Agency" field.

Record the item by clicking "Next" or "OK".

•	If you collect sales tax at more than one rate, or if you pay sales tax to more than one agency, then you must set up a separate tax item for each tax you collect for each agency.

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Setting Up Tax Groups
Even though you may be charging your customers a combination of local taxes and a state tax, they're used to seeing only one sales tax line and rate on sales forms. A tax group lets you track each tax separately, yet show only the total sales tax on your sales forms.

When you use a tax group on a sales form, QuickBooks calculates each tax individually, then adds the individual taxes together to get the total tax. Because QuickBooks rounds the individual tax amounts to the nearest cent, the total for tax group may be slightly different than the total you would get if you combined the rates of the individual taxes and applied the single rate to the sale. Don't worry about this discrepancy; QuickBooks calculates and reports each individual tax amount correctly.

Choose "List" and then "Items List" to display the "Item List" window.

From the "Item" menu button, choose "New".

From the "Type" list, select "Sales Tax Group".

Enter a name for the group in the "Group Name" field.

Enter a description in the "Description" field to describe this sales tax on your sales forms.

•	The description prints on your sales forms after the final line item. You cannot edit it on the forms themselves. If you want to edit sales tax, you will need to edit the tax, as you would edit an item.

In the "Tax Item" column, choose the single taxes that make up this group from the drop-down list. When you press the tab, QuickBooks fills in the rate, tax agency, and description of the single tax you have selected. Continue to add single taxes to the group until all the correct taxes are included.

Record the item by clicking "Next" or "OK".

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