This chapter is from the book
This chapter is from the book
This chapter is from the book
Using Item Types in QuickBooks
QuickBooks has 11 item types to choose from, although some might not be listed in your data file if the related feature is not enabled. You can choose the type to assign to a list item; however, each type has certain unique characteristics. Here are some general guidelines about the proper use for item types:
- Service—You usually create this type for services you sell and, optionally, purchase.
- Inventory Part—This type appears only if Inventory and Purchase Orders are active on the Company tab of the Items and Inventory preferences (click Edit, Preferences, select Items and Inventory, and click the Company tab). Inventory is used to track products you make or buy, place in a warehouse location, and later sell to a customer. Inventory is increased with a received purchase order or bill and is decreased on a customer invoice.
- Inventory Assembly—This type is an assembling of multiple inventory components, as in a Bill of Materials. When an inventory assembly is built the individual items (components of the assembly) are deducted from inventory and the quantity of the finished product is increased.
- Non-inventory Part—This type is used for products you purchase but do not track as inventory. Correct use of this type would include products you purchase that are drop-shipped directly to the customer, or materials and supplies you purchase but do not sell to the customer.
- Other Charge—This is a multi-purpose item type. Freight, handling, and other miscellaneous types of charges are examples of the proper use of an other charge item type. Using this type makes it possible to see your services separate from the other charge types of revenue and expense.
- Subtotal—This type is used to add subtotal line items on sales and purchase forms.
- Group—This type is used to quickly assign a grouping of individual items on sales and purchase forms. Unlike assemblies, groups are not tracked as a separate finished unit.
- Discount—This type facilitates dollar or percent deductions off what your customers owe on a sales form. This item type cannot be used on purchase forms.
- Payment—This item type is not always necessary to set up. You create this item type if you record the payment directly on an invoice as a line item, such as is done with a Daily Sales Summary form (see the QuickBooks Help menu). On typical customer invoices you should not record payments in this manner because there is no tracking of the customer's check or credit card number.
- Sales Tax Item—This type is only available if you enabled sales tax by selecting Yes to charging sales tax on the Company tab of the Sales Tax preferences (click Edit, Preferences and select Sales Tax). In most cases, QuickBooks automatically assigns this item to an invoice. In some states or industries where there are multiple sales tax rates for a given sale, you can also add this item to an invoice as a separate line item.
- Sales Tax Group—This type is used to group multiple tax district flat-rate sales tax items that are combined and charged as one sales tax rate.
Rescue Me!
Carefully determine the correct item type to use when creating items. Once created, the following item types cannot be changed to any other item type: Service, Inventory Assembly, Subtotal, Discount, Payment, Sales Tax Item, and Sales Tax Group. If you find you have set up the wrong item type, correcting it might require making an accounting adjustment. To avoid using the incorrect item on future transactions mark the item as inactive by clicking Lists, Items. The item list dialog opens. Select the Item button, choose Edit Item, and place a checkmark in the Item Is Inactive check box. When this box is selected, as Figure 3.4 shows, the item will not be included in any drop-down lists on forms but will be included in reports if used during the period being reported.
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Figure 3.4 Marking a list item inactive only removes it from drop-down lists, not reports.