You already know you can use QuickBooks to track your business finances and prepare and receive invoices. You can also use it to see what is selling and what is not so you can properly plan for your business’s future. However, to get the most out of QuickBooks reports, you’ll need to make sure they’re accurate. And that accuracy depends on how well you define the items you create.
There are a number of different parts in item record reports that you should define. Haphazard definitions can make your item reports – and even your receipts – more confusing than they need to be. When labeling in QuickBooks, give careful consideration to the following:
- Service – What service does an item provide? Are they your web designers? A vendor? Do they provide employee training?
- Inventory Part – If you want detailed records about the value, quantities you have, and costs of goods sold, you need to define the items as inventory parts.
- Inventory Assembly – Also known as bills of materials, this is for sellers who sell items that consist of multiple products. If you want to track the compilations as individual units, they need to be defined as assemblies.
- Non-Inventory Parts – This is typically for defining things that are not part of the inventory. Most commonly, this is used for special orders for customers.
The above list covers all the essential definitions for the items that you stock and sell every day. By labeling the items effectively, your item reports – be they inventory, receipts, or otherwise – will be much easier for you to read, allowing you to put a priority on what is making you the most money. If you have chosen to forgo this labeling, you may be holding your business back by missing out on relevant data.
Defining items correctly is just one small part of tackling the very large beast that is business accounting. if you find yourself need a little more help, contact us today to talk through your options.