Adding product and service items in QuickBooks Online
How to set up non-inventory and service items in QuickBooks Online, including costs, categories, and making items inactive when needed.
QuickBooks Online lets you track income and expenses for each thing you sell, but only if you enter those products and services as items first. Once they exist, you can add them to sales forms in a couple of clicks, and your reports get more detail with less typing at the point of sale.
Which item type should you choose?
QuickBooks Online offers four item types, and the right choice depends on whether you track quantities.
An inventory item is a product you sell and track stock for. Inventory features are available on the Plus and Advanced plans. A non-inventory item covers things you buy or sell without counting, such as hardware consumed on an installation job rather than sold on its own. A service item is work you perform for a customer. A bundle groups several products or services into one sellable unit, like a gift basket.
How do you create a non-inventory or service item?
Open your products list from the Sales and getting paid area of your settings, then choose Products and services. From the New menu, pick either Non-inventory item or Service.
Give the item a name, and add a SKU if you track them. Choose the category that best fits the item from the Category dropdown. Both of these help your reports later, so a little care here saves time.
Two optional fields follow. If you use class tracking, select or add a class. If you are on Intuit Enterprise Suite, you can also assign dimensions for finer reporting. Everyone else can skip these.
What if you buy the item from a vendor?
Many service and non-inventory items involve a purchase side as well as a sales side. To record it, find the item in your list and choose Edit in the Action column. Tick the checkbox indicating you purchase this product or service from a vendor.
Then fill in the purchase details. The description you enter appears on bills, purchase orders, and other vendor forms. Add your cost, and do not worry if the price moves later; you can enter the updated amount when you actually buy supplies. Pick the expense account that tracks the cost of things you sell, choose your preferred vendor, and save.
How do you edit or retire an item?
To change an item, find it in your list, select Edit in the Action column, and make your updates. Saving keeps everything else intact.
Retiring works differently from deleting. Open the dropdown in the Action column and choose Make inactive, then confirm. The item stops appearing on new forms but stays in your history.
Inactive items are hidden by default. To see them, select the Filter icon, set the Status dropdown to All, and apply. Find the item you want back, then choose Make active from the Action column. It returns to circulation without any re-entry.
A few fields matter more than others
You can skip the optional tracking fields when you are starting out. The name, category, and sales price do the heavy lifting. The purchase-side fields matter most when an item has a real cost attached to it, since they keep your expense reporting clean.
Setting items up this way takes a few extra minutes per item. In exchange, your sales forms fill faster and your reports can break down revenue by product, service, or category, which is hard to reconstruct later from free-text descriptions on invoices.