Sunday, June 30, 2013

Items – Part I

Consider that you are writing a paper invoice for your business – the description that you use for the item of inventory or type of service provided is an Item in QuickBooks.  The sales tax(es) that you charge will also be an Item.  There are 11 different types of Items in QuickBooks.  Today I will discuss the key types and how you would use them in your business

The first type we will look at is the Inventory Part Item.  You will create an Inventory Part for every part that you stock in your business for sale.  This means every size nut and bolt, every color of a 4 ounce skein of baby yarn, every brand of oil filter that you stock in your store for sale.  For each item, you will enter a separate, distinctive name, determine if you want it to be part of a larger group (i.e. the “parent” group is Nuts and each size is a subset of the group).

If you combine individual parts to make a pre-assembled part, then you will record them as an Inventory Assembly Item.

The next type is Service.  If you own a plumbing supply store selling parts to do-it-yourselfers and also have a staff of plumbers who will do the repairs for customers, then you will use both Inventory and Service Items.  The parts you use will be Inventory Items and the labor will be a Service.  As a QuickBooks consultant, I bill for services such a bookkeeping, training, trouble shooting.

The last one to be discussed today is Sales Tax.  For each taxing authority, you will need to set up a separate item for each.  You may be fortunate to only have a single statewide sales tax – then you would only need to set up one tax item.  If you collect sales tax for a city, county, or other designated tax region, you will set up an item for each.  Only enter the amount that goes to each tax authority – i.e. the overall tax you need to charge is 8% where 7% goes to the state and 1% goes to the city.  If you only want to show a single tax line on your invoice, then you will need to create a Sales Tax Group with all of the individual taxes.

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