When using Quickbooks to keep track of your business’s finances, you’ll need to record the number of products or services sold by your business. Intuit’s accounting software makes accounting a breeze. To ensure your entries are correct, however, you’ll need to choose the right type of product or service. Quickbooks currently supports four separate choices for product and service “items,” each of which is described below.
An inventory item is a product purchased or sold by your business that you want to track the quantity for. If you regularly purchase products from a wholesale supplier, for example, you can create an inventory item to track how many units your business has purchased. Alternatively, you can use an inventory item to track the number of product units your business has sold. If you want to track the quantity of a tangible product that’s purchased or sold by your business, use an inventory item.
Like inventory items, non-inventory items also consist of products purchased or sold by your business. The only difference is that inventory items are tracked, whereas non-inventory items are not tracked. For small components, such as nuts or bolts, a business may choose not to track quantity, in which case a non-inventory item should be used.
Not all businesses sell tangible products. Millions of U.S. businesses rely on service sales to generate profits. If your business sells a service, or multiple services, you should choose the service item type in Quickbooks. Examples of service items may include professional landscaping services, legal consultations, office cleaning and data recovery. Because they aren’t tangible, they are considered services, so the service item should be used when tracking them in Quickbooks.
Finally, a bundle item is a collection of two or more products or serviced sold by your business. A landscaping company, for example, may sell lawn mowing as well as flower planting as a bundled service. When two or more products or services are sold together, it’s tracked using the bundle item type in Quickbooks.
Keep in mind that you can change the item type of product or service in Quickbooks. This is done by clicking the gear icon on the toolbar and choosing “Products and Services” under “Lists.” From there, you can edit the product or service to change its item type.
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