QuickBooks has not only made it easier for organizations to manage their accounting and bookkeeping tasks but with innovative features integrated into the newer versions, businesses can be sure to witness a boost in productivity. A large number of organizations use QuickBooks and for some, it has even replaced the need for an in-house accountant.
Among the many useful tools integrated into QuickBooks, there is another feature called ‘item types.’ QuickBooks refers to items as anything that a company sells, buys, or resells in the course of business transactions. Products, shipping charges, sales tax and discounts are all examples of items. It is easier when items are thought of as something that shows up on an invoice or any other type of sales form.
Different Types of Items
QuickBooks offers around 11 item types that can be presented on a sales form like services and products you sell or the things you buy. You can use items when you create new invoices, create orders for purchase, or you buy new equipment or supplies.
While items provide a convenient way to enter data, much of their role is on the back-end, where all the complex accounting jobs are handled. When you create an item, you are supposed to link it to an account. When the item is used on any type of sales form, it records the entry in the account, i.e. in the account receivable/payable, checking or fixed asset accounts.
Items are really easy to setup, but before you begin, you should decide whether using items is what you want and how you plan to benefit from them. Decide on the nature and amount of details you want on your invoice and other financial statements and be sure to keep these details in mind when you setup each item. For example, if you are a carpenter and you create furniture, you can either charge a flat rate for the entire sofa or break it down into labor and material.
Here are the types of items QuickBooks allows you to setup:
Service: Charged services, like, labors, consulting, and fee.
Inventory Part: Purchases that are tracked as inventory and resold.
Inventory Assembly: Assembled goods, which you purchase, track as inventory and resell.
Non-Inventory Part: Goods you buy but don’t track such as office supplies.
Fixed Asset: An asset, which you don’t plan to convert to cash for at least a year.
Other Charges: Labor, material, service, or, product charges, fees, surcharges, sales tax, handling fee, etc.
Subtotal: Creates a total amount of all the items above it.
Group: Groups offer a great way to associate individual items that appear together on invoices, purchase orders, and other items that can be added to the form at one time.
Discount: Subtracts a percentage or set amount from the total.
Payment: Records the payment received at the time of a sale.
Sales Item Tax: Calculates a single sales tax item at a specific rate that you can pay to a tax agency.
Sales Tax Group: Calculates and keeps records of two or more sales tax items that apply to the same sale.
If you wish to do more with the items option, you may need to look at upgrades for your current version of QuickBooks.