Improvements to QuickBooks Online Inventory

Improvements to QuickBooks Online Inventory

Improvements to Items and Inventory in QBO – by Woody Adams

Some are reading that title and thinking; “wait, inventory is only in QBO Plus, what is going on here?” True that. However, this past year we have enhanced product & service functionality even at the Essentials level. Essentials has time tracking now and time tracking only users and settings, what? Yup. But this article regards item and inventory improvements we had this year, and I will not be detailing dates of such changes as my memory is real suspect. And when I say “items” I mean products & services, which is a minor pet peeve I have with QBO in general. I just like “item or items”, way easier to mutter. Ha! “Mutter”. Nobody says that anymore…

Inventory Improvements—Quantity Adjustment, Starting Value Adjustment, Low Stock/Out of Stock/Reorder Point

Other Product & Service Improvements—Categories, Bundles, Sku

In order to really align QBO Plus with QB Pro, we had to allow the ability to make quantity and value adjustments. And by adjustment, I don’t mean editing the P&S and changing the quantity on the fly. That was never a good idea, and you couldn’t change the quantity for a prior date either, it would have to be as of today at least, and that was rather annoying…So we added two adjustment related features, one for quantity and the other for starting value, which I have an important qualification to make about when I get to it.

When I create a new inventory product in QBO Plus, I NEVER enter the current QOH in the setup window. Why? It will hit Opening Balance Equity. Please, don’t do that. Go enter a bill, write a check, or a credit card expense, any vendor posting transaction to “receive” the items into inventory. We really need to remove all those open balance fields on list elements in QBO, period…

But what if you want to change the current QOH of an inventory part? On the P&s list, click the arrow next to Edit in Action column, then click on Adjust quantity, seen screenshot below. In the shot, check out the other options now…the last 3 in list are what is really critically new IMHO. The cool thing about adjusting quantity is it is an actual transaction type. Oh, editing the item record before the change QOH on fly did qualify as a QTY adjustment and would show on reports as its own transaction type too, but I feel QTY adjustment has finally had its day. 2nd screenshot below is the actual Inventory Quantity Adjustment window. I can choose the adjustment account, as QBO will default to Inventory Shrinkage, an account QBO auto creates in your COA. You can choose another based on your needs. I suggest keeping it to a COGS type account however and I am sure you accountant will agree. Note I can even tag a class, location, Memo to the adjustment. In my example below, I reflect a new QOH for Ball of Yarn of 150, a change of 50, which debits inventory asset and credits inventory shrinkage.

If you are not sure the T-chart, don’t click Save & Close, instead click Save and then click More tab/Transaction Journal.

Now, this adjustment transaction will show up on related reports, including the Inventory Valuation Detail report. Note also, Starting Value in the screenshot below. These will have blue links underneath them in the report that will take you to the adjustment. Starting value is like a Value Adjustment in QB Pro, but not really. Why not really? It is not meant as a periodic value adjustment maneuver. It is meant to be a onetime event, like Woody entered the wrong cost or value for the item when setting it up so I need to go back and change its Starting Value kind of adjustment. I can also get to this value adjustment from the P&S list, the arrow next to Edit in Action column. Or from a couple reports like the one below.

Get a little popup warning too when you go to change Starting Value of an inventory part…

From screenshot below, you want to impact the Initial cost field, make the value change there. And watch the adjustment account! It defaults to OBE, so make sure to change it appropriately before you hit Save & Close. Further below, I show a screenshot of me changing the Initial Cost from 1.00 to 1.50 and I also chose an proper COGs adjustment account.

The Inventory Starting value adj will also show up in Search field when you left click it, as well as related reports…You all know re the Search field right? Click in there to see more recent transactions entered!


Above are the main enhancements impacting Inventory in QBO Plus. The remainder of the article will focus on enhancements added to QBO Essentials and Plus but not specifically related to inventory. For example, a Bundle item might include inventory parts but I don’t need Plus to create Bundle items…etc.

Used to be, QBO had a gap vs. Pro, no group items. We added that recently to Essentials and Plus, and we call it Bundle. The Bundle item is totally a group item. I cannot think of a difference except that QBD supports Other charge items that can have a %, not just an amount. I know, I know, it’s the little things…How is that file transfer working out for you? That is loads of fun too. How important is that lack of other charge item type now in QBO? Exactly, not nearly as critical as you once thought…

The Bundle—Go to your P&S list, however you like to get there, click on New tab in upper right and you will see Bundle as a 4th type option. Oh, forgot to mention…While we still call items in QBO “Products & Services”, we decided to differentiate a bit better between the type of P&S you are creating. Inventory, Non-inventory, Service and Bundle. If you don’t see Bundle, you are in QBO Simple Start. Or Self-Employed, LOL. Well, QBSE has no P&S list but still, that is funny…need to take a drink…

Back…Oh, I can also now filter my P&S list by type to help me find stuff easier. Forget when we improved the filtering but it really helps me daily. Wait, what are Categories and how did I group my P&S list so visually impressive? I will get to that.


A while back I created a Bundle item called Groom & Board, see in screenshot below. Key things to point out: You can name it, add a Sku (will get to that later), sales description, then add all the P&S that are part of the bundle aka group item. Bundle is NOT a build assembly. There sales price and any costs will be determined by the Bundle’s component parts. I cannot set a price or cost different from the price/cost of the items in the bundle. And like a Group item in QBD, I can chose to “Display bundle components when printing or sending transactions” or not. So I can see all the detail on the screen but my customer will only see Groom & Board and the price. To me, this is the most important part.

When on a sales form…

Here is the transaction journal of the above entry…

Let’s end with Categories, which really represents QBO’s new way to support sub-items. If you convert a QBD file to QBO that has sub-items, you will see an option to convert the subs into Categories. Really helps in filtering the P&S list, pick correct products on a sales form and even filter reports. Enhances visibility, and for me, really it is about the P&S list and a clearer understanding and grouping.

In All Lists under Gear icon, you will see Product Categories. You can also manage your categories in the P&S list itself.


Category is just a name. Add some, then you can assign your products and services to a Category. Basically I am creating Item groups. I can then filter the P&S list by a specific category…like Dog Attire below, and focus in on those products.

I often like to filter the list by Uncategorized so I can batch assign products to their respective Cats…In the screenshot below, I am batch assigning several services to the Treatment category…

Now, when I filter the P&S by the Treatments category, I can see them all grouped…

Categories also infiltrates the P&S list dropdown on sales forms, so I can make sure I am choosing the correct item, and I can even quick-type based on Category to find the products in that group, etc…That has got to help with data entry. See screenshot below…

Well, that just about…..WAIT! Stock status and re-order points, wow, the list just keeps going on and on…ok then we be done…

See above. I have filtered the P&S list by my Dog and Cat toy category as these are super popular sales items, daily. My concern is the Red rubber ball. At top of list is the Low Stock alert and the Out of Stock alert. I know I need to purchase some red rubber balls, the reorder point being 3, which is mildly humorous. I need to change that to a more reasonable point. And 12 of my items are getting low. So I might as well purchase those too. and I can purchase in batch assuming the low and out of stock items have the same vendor…Before I do that, see how Reorder point is used when I edit the product record…I updated the point to 50. See below how I can batch purchase too…

Note: Reorder points and stock level tracking is supported for inventory parts ONLY…


Now the QTY I need to order is not auto-filled on the PO based on the Record point of the product. It defaults to 1, so I still need to enter the QTY I want to order. Important to note, but still, nice to see all items I need to purchase from same vendor on one PO…I hover over the QTY field and I get a popup for QOH and Reorder point, then I just click into field and enter amount…

The hovering popup happens on sales forms too, and while not tracking “availability to promise” to a customer, it does give me visibility to current QOH. As there is no Sales Order tracking at this time in QBO, I am restricted like a QB Pro user is, by the current quantity on hand of an item. Sales receipt is the shot below…

Oh, below is a shot of me filtering a report by Category…

Remember, you can now add Sku info at the product level and see that column on sales forms, reports and the product and services list. Though I cannot change the Sku label name, I could use this field as a “custom field” at the item level. I mean Sku can mean anything, right?



Attach Bank and Credit Card Statements in QuickBooks Online

Attach Bank and Credit Card Statements in QuickBooks Online

A recent conversation in my Facebook group was all about how to attach bank and credit card statements in QuickBooks Online. I thought it would be a great to show the two methods of doing this.

Using zero dollar transactions to attach bank and credit card statements in QuickBooks Online

The first way to attach bank and credit card statements in QuickBooks Online  is a bit more “old school” method, and my preferred way of doing this, because you can create custom reports that make it easy for users to find statements for any account in one place.

Similar to my method of attaching sales tax & payment tax returns and payment confirmations, this method also uses the zero dollar transaction.

First, create a new vendor that corresponds to the account: in this case, we’ll add “Amex 30018 Statements” to our vendor list:


Vendor Center > New Vendor


Next, you’ll navigate to the Amex register and create a transaction that posts to/from the Amex account, and has the same ending date shown on the statement:

Quick Create > Expense


Do the same for all of the accounts that you’d like to attach bank and credit card statements in QuickBooks Online: PNC, Bank of America, even PayPal.


Now you can create a report that will list all transactions to which attach bank and credit card statements in QuickBooks Online. We’ll set the filter to just show transactions for the current year, and selected vendors:

Reports > All reports > Transaction List By Vendor > Customize


Sharing the report for other users makes it very easy for everyone to access the bank statements. They simply open the report (or bookmark it for easy access) and click on each transaction to find the statement attached.


Using the vendor detail page to attach bank and credit card statements in QuickBooks Online.

The second method is much more simple, but doesn’t allow for the ability to see all statements in one list or report.

As in the first method, you create a new vendor.

Next, you simply navigate to the vendor detail page, click on the attachments tab, and drag and drop the statement.

Vendor List > Edit Vendor


Either way works, you just need to decide what method works for user needs, when you attach bank and credit card statements in QuickBooks Online.

Hope this little how-to was helpful!

Use Zero Dollar Transactions to Upload Sales/Payroll Tax Confirmations in QuickBooks Online

Use Zero Dollar Transactions to Upload Sales/Payroll Tax Confirmations in QuickBooks Online

One of my favorite things about QuickBooks Online is the ability to attach documents to transactions, customers & vendors. It’s a great way to keep track of receipts, engagement letters, and W9s. However, there’s a limitation to this: users are not able to attach documents to sales tax transactions or payroll tax payments, made outside of QuickBooks Online Payroll epayments and efilings (ie: Michigan Unemployment payments have to made directly online via the MiWAM site.)

I have a simple work around that allows me to attach efile and epay confirmations, and at the the same time, make it easy to find these transactions via a QBO search.


I use Zero Dollar Transactions to upload Sales/Payroll Tax confirmations in QuickBooks Online.


First, let’s look at a Sales Tax payments. Here we are, processing the Sales Tax payment, after clicking on “Sales Tax” from the left nav:



This is where we can enter the confirmation number from our online payment – note, no place to attach a PDF confirmation from the state’s website:



To do that, we need to open the Sales Tax Liability register, from the Chart of Accounts:



From the register, I want to add a new Journal Entry:



Here’s how to enter the JE:



The date for this JE should be the same as the date you posted the Sales Tax payment in the QBO Sales Tax Center.
Now, you can easily search for these transactions, using the Vendor Name:



This process works exactly the same for payroll liabilities, we just use a Vendor Name specific to the type, such as “Michigan WH Confirmations” or “Michigan UIA Confirmations”.

Another way we use the zero dollar transaction is to attached statements to registers.

You can see an example of that below. We reconcile this transaction when we reconcile the account.



And again, assigning a Vendor Name helps us find statements later:



Hope these little tricks are helpful to you!

Undeposited Funds Really Does Make Sense

Undeposited Funds Really Does Make Sense

I’m Shannon Phares, Operations Director at Kildal Services. The new year begins with me being pushed and encouraged by many friends –  including StacyK – to go beyond the fence, open the gate, and get out of my comfort zone for once!  The thought of being on camera or video scares the crap out of me!  However, I felt compelled to create a short video to help our clients with a common problem: managing Undeposited Funds.

Undeposited funds really does make sense, I promise.


I recently completed another QuickReview™, and after Stacy spoke to the client, she hired us for the clean up. Shortly after, I received an email from the client in which she said that no matter what she did, she just wasn’t grasping the concept of Undeposited Funds. I decided we needed a resource to share with her – and future clients – to help explain it all.

Because this is not the first time we’ve seen our clients struggling with how to use the Undeposited Funds account, I decided to put on my “big girl pants” and make my first ever video. (I even managed to stomach watching the entire thing myself.) 

Stacy always tells clients to think of Undeposited Funds as the accounting system equivalent of their cash drawer: it’s where the payments a business has received are “stored” until they get taken to the bank. It’s a way of ensuring that deposits in QuickBooks Online match what was taken to the bank and ultimately shows up on the statement.

Using Undeposited Funds in QuickBooks Online helps make bank reconciliations easier at month end. 


If after watching this video, it still doesn’t make sense, I would recommend you reach out to us for some training.

Here it is, my video on managing Undeposited Funds in QuickBooks Online:

Shannon Phares, Operations Directory, graduated from Walsh College of Accountancy with a BA in 1999. She is also a Certified Bookkeeper through the American Institute of Professional Bookkeepers, a Notary Public, and a Certified QuickBooks ProAdvisor.  Shannon has extensive experience with QuickBooks Enterprise Solutions, inventory management, setup and data clean up. Our clients love her attention to detail and her ability to quickly analyze an issue and offer solutions (which is most likely a result of her obsession with all things forensic!).
Survey: Content to help accountants set up clients

Survey: Content to help accountants set up clients

Hey friends! If you could help me to help my friend, Steve Blundell. He works for Intuit, and is looking into developing some new resources for accounting professionals. He is specifically looking at the need for content that helps accountants set up new or existing clients within QuickBooks Online for specific verticals.

Are you interested in content that helps accountants set up new or existing clients within QuickBooks Online for specific verticals?


Steve is looking to get some feedback on what would be helpful for accounting professionals when setting up a specific industry (ie: restaurant, contractor, etc.) and has created a survey to gather more info on not only whether there’s an interest in it, but what accounting professionals would want these resources should include.

Here’s the email he sent me:


My name is Steve Blundell from Intuit.  We are working to develop content that helps accountants set up new or existing clients within QuickBooks Online for specific verticals.  With the help of QuickBooks Online ProAdvisors these guides have been developed to make it easy for you to serve a multitude of verticals from within QuickBooks Online.

An example of an industry guide is attached.  We would like to ask you to take a few minutes and review the guide and take just a few more minutes to respond to a survey HERE so we can best develop this content based on your feedback.

We appreciate your time

Steve Blundell

Intuit Accountant Segment Leader

If you could take a few moments and fill out Steve’s survey, both he and I would greatly appreciate it.


Pin It on Pinterest