hand, how much they’re worth, and how much money you

made on the placemats you’ve sold.

Setting Up Items On the other hand, the faux pony mousepads you keep in the
Whether you build houses, sell gardening tools, or tell storage closet for your employees are business supplies. Most
fortunes on the Internet, you’ll probably use items in companies don’t bother tracking inventory for supplies like
QuickBooks to represent the products and services you these, which they consume in the course of running their
buy and sell. But to QuickBooks, things like subtotals, business.
discounts, and sales tax are items, too. You can also Track inventory if you want to know when to reorder
use items to fill in the bills and other purchase forms you products so you don’t run out. If you sell the same items
over and over, keeping your shelves stocked means more sales
record.
(because the products are on hand to sell as soon as an order
Items form the link between what you sell and buy and
comes in). QuickBooks can remind you when it’s time to
the income, expense, and other types of accounts in reorder a product.
your chart of accounts. When you create an item, you
describe what the item is, how much you pay for it, how Don’t track inventory if you purchase products
much you sell it for, and the accounts to which you post specifically for jobs or customers. If you special-order
the corresponding income, expense, cost of goods sold, products for customers or buy products for specific jobs, you
and asset value. You also create items for other stuff don’t need to track inventory. After you deliver the special
you add to sales forms, like discounts, shipping charges, order or complete the job, your customer has taken and paid
and subtotals. for the products, and you simply have to account for the
Items make it easy to look at your company’s finances income and expenses you incurred.
from different perspectives. You can set up your chart of Don’t track inventory if you rent equipment to
accounts based on the accounts you want to show on customers. If you receive income from renting or leasing
your financial statements, which usually represent broad assets you own, you can show the value of the for-rent
financial categories. Items, on the other hand, let you products as an asset in QuickBooks and the rental income as a
Service item, so you don’t need Inventory Part items.
track income and expenses to the level of detail you
want. For example, you might set up two income
Your business model might dictate that you track inventory.
accounts: one for services and one for products. However, QuickBooks’ inventory-tracking feature has some
However, you can create items for every type of service limitations. For example, it lets you store only 14,500 items,
and product you sell. QuickBooks has built-in item-based max. How can you tell whether QuickBooks’ inventory fits the
reports that show the dollar or peso value of sales by bill? If you answer yes to any of the following questions,
item or the number of inventory units you’ve sold. QuickBooks isn’t the program to use to handle the products
Without items, you can’t create any type of sales form in you sell:
QuickBooks, including invoices, statements, sales receipts, Do you sell products that are unique? In the business
credit memos, and estimates. But if you don’t use sales forms, world, tracking inventory is meant for businesses that sell
you don’t need items. commodity products, such as electronic equipment, and stock
Should You Track Inventory with numerous units of each product. If you sell unique items, such
as fine art or compromising Polaroid photos, you’d eventually
Items? hit QuickBooks’ 14,500 item limit. For such items, consider
If your business is based solely on selling services, you can using a spreadsheet to track the products you have on hand.
skip this section. But if you sell products, keep reading to
Do you manufacture the products you sell out of raw
understand your options.
materials? QuickBooks’ inventory can’t follow materials as
You can handle products in two ways: by stocking and tracking
they went through a manufacturing process or track inventory
inventory or by buying products only when work for your
in various stages of completion.
customers requires them. The approach you use affects the
types of items you create in QuickBooks.
Do you value your inventory using a method other than
If you buy products specifically for customers, you need items,
average cost? QuickBooks Pro and Premier calculate
but you don’t have to track the quantity on hand. In this case,
inventory value by average cost. If you want to use other
you create Non-inventory Part items, which you’ll learn about
methods—like last in/first out (LIFO) or first in/first out (FIFO)
shortly. For example, caterers prepare meals for various types
—you can export inventory data to a spreadsheet program and
of events, so they usually purchase the materials and food
then calculate inventory cost there. Or you can upgrade to
they need for a specific job and charge the customer for those
QuickBooks Enterprise Platinum, which includes Intuit’s
goods. Because caterers don’t keep food in stock, they don’t
Advanced Inventory subscription feature.
have to track inventory and can therefore use Non-inventory
Do you use a point-of-sale system to track inventory?
Part items.
Point-of-sale inventory systems often blow QuickBooks’
On the other hand, grocery stores sell the same kinds of food
inventory tracking out of the water. If you forgo the
products over and over. These businesses purchase goods and
QuickBooks inventory feature, you can periodically update your
store them in their retail spaces, selling them to their
QuickBooks file with the value of your inventory from the
customers each day. These goods can be set up as Inventory
point-of-sale system.
Part items in QuickBooks. When you use the program’s
inventory feature, QuickBooks keeps track of how many
You don’t have to use the QuickBooks inventory feature if you
products you have on hand, increasing the number as you
don’t want to. For example, if you perform light manufacturing,
purchase them and decreasing the number when you sell them
you can track the value of your manufactured inventory in a
to customers.
database or other program. You can then periodically add
So, before you start working with items in QuickBooks, you
journal entries to QuickBooks to show the value of in-progress
actually have two inventory decisions to make. First, should
and completed inventory.
you track inventory? And second, should you track inventory in
QuickBooks? Planning Your Items
Because tracking inventory requires more effort than buying Setting up items in QuickBooks is a lot like shopping at a
only the materials you need, use the following guidelines to grocery store. If you need only a few things, you can shop
determine whether your business should track inventory: without a list. Similarly, if you’re going to use just a few
Track inventory if you keep products in stock to resell QuickBooks items, you don’t need to write them down before
to customers. If your company stocks faux pony placemats you start creating them.
to resell to customers, those placemats are inventory. By But if you use dozens or even hundreds of items, planning
tracking inventory, you know how many units you have on your Item List can save you lots of frustration.
By deciding how to name and organize your items before you top-level tree item, the landscaper might create subitems for
create them in QuickBooks, you won’t waste time editing and several species: maple, oak, elm, sycamore, and dogwood.
reworking existing items to fit your new naming scheme. You can create up to five levels of subitems to represent
Generic or Specific? categories such as size (seedling, established, and mature,
Conservation can be as important with QuickBooks’ items as it say).
is for the environment. QuickBooks Pro and Premier can hold Catchall Subitems When you develop a hierarchy of parent
no more than 14,500 items, which is a problem if you sell items and subitems, eventually someone in your company will run
unique products, such as antiques, or products that change across a service or product that doesn’t fit any of the existing
frequently, such as current clothing styles for teenagers. Once subitems. If you assign a transaction to a parent item that has
you use an item in a transaction, you can’t delete that item, so subitems, Quick- Books automatically creates a subitem called
you could end up with lots of items you no longer use. By “Other” as a catch basin. For example, if you have a parent item
planning how specific your items will be, you can keep your called Security Services, you’d get a subitem called Security Services-
Item List lean. Other. Catchall items can act as holding pens while you figure
For instance, a generic item such as Top can represent a girl’s out which specific subitem you should use. They’re also an
black Goth T-shirt one season and a white, poplin button-down easy way to look for transactions that should be reassigned to
shirt the next. Generic items have their limitations, though, so a different subitem. For instance, you can create a transaction
use them only if necessary. For example, you can’t track by using the Security Services-Other item, and then change
inventory properly when you use generic items. QuickBooks the item in the transaction later when you’ve identified (or
might show that you have 100 tops in stock, but that doesn’t created) the correct subitem.
help when your customers are clamoring for white button-
downs and you have 100 black Goth T-shirts. In addition, the Creating Items
information you store with a generic item won’t match the The best time to create items is after you’ve created your
specifics of each product you sell. So, when you add generic accounts but before you start purchasing goods from vendors
items to an invoice or a sales form, you’ll have to edit a few or invoicing customers. Each item links to an account in your
fields, such as Description or Price. chart of accounts, so creating items goes quicker if you can
choose existing accounts.
Naming Items You can create items while you’re in the midst of creating an
Brevity and recognizability are equally desirable characteristics invoice, but you’ll find that creating items goes much faster
in item names. Short names are easier to type and manage, when you create several at once. How long it takes to create
but they can be unintelligible. Longer names take more effort items depends on how many you need. If you sell only a few
to type and manage but are easier to decipher. Decide ahead services, a few minutes should do it. On the other hand,
of time which kind of name you prefer and then stick with it as construction companies that need thousands of items can save
you create items. hours of data entry by importing items from third-party
QuickBooks encourages brevity because it limits item names to programs.
31 characters (including spaces). If you sell only a handful of Each item type has its own assortment of fields, but the overall
services, you can name your items the same things you call process of creating an item is the same for every type. With
them. For instance, for a tree service company, names like the following procedure under your belt, you’ll find that you
Cut, Limb, Trim, Chip, and Haul work just fine. But if your Item can create many of your items without further instruction. (If
List runs into the hundreds or thousands, some planning is in you do need help with fields for a specific item type, read the
order. Here are factors to consider when naming items: sections that follow to learn what each field does.)
1. On the QuickBooks Home Page, click Items &
Aliases. Create a pseudonym to represent the item. For a Services (or choose Lists→Item List) to open the Item
carpet company, “Install standard” could represent the List window.
installation along with vacuuming and hauling waste, whereas
“Install deluxe” could include the standard installation plus When you first display the Item List, QuickBooks sorts the
moving and replacing furniture. You can include the details in entries in it by type. The sort order for the item types isn’t
the item’s description. alphabetical—it’s the order that types appear in the Type drop-
Sort order. In the Item List window (Lists→Item List), down list. You can change the Item List’s sort order by clicking
QuickBooks sorts items first by type and then in alphabetical a column heading.
order by name. So/ if you want your items to appear in some 2. Press Ctrl+N or click Item→New.
logical order in drop-down lists (like an invoice item table), pay
QuickBooks opens the New Item window and selects Service in
attention to the
the Type drop-down list.
order of characteristics in your item names. For example, if
3. To create a Service item, just press Tab to proceed with
you created “Deluxe install” and “Standard install” Service
naming the item. To create any other type of item,
items, other Service items beginning with the intervening
letters of the alphabet would separate them in drop-down lists.
choose it in the Type drop-down list.
By naming your installation items “Install deluxe” and “Install
Some item types won’t appear in the list if you haven’t turned
standard” instead, they’ll show up in your Item List one after
on the corresponding feature. For example, the Inventory Item
the other.
type doesn’t appear unless you’ve turned on inventory
Abbreviations. If you have to compress a great deal of
tracking.
information into an item name, you’ll have to abbreviate. For
4. In the Item Name/Number box, type a unique identifier for
example, suppose you want to convey all the things you do
the item.
when you install a carpet, including installing tack strips,
padding, and carpet; trimming carpet; vacuuming; and hauling
For example, if you opt for long and meaningful names, you
waste. That’s more than the 31 characters you have to work
might type Install carpet and vacuum. For a short name, you
with. Poetic won’t describe it, but something like “inst trim vac
might type Inst Carpt.
haul” says it all in very few characters.
5. To make this item a subitem, turn on the “Subitem of”
checkbox, and then choose the item that you want to
Subitems
If you keep all your personal papers in one big stack, you act as the parent.
probably have a hard time finding everything from birth If the parent item already exists, simply choose it from the
certificates to tax forms to bills and receipts. If you’ve got one “Subitem of” drop-down list. To create the parent while
big list of items in QuickBooks, you’re in no better shape. To creating the subitem, choose <Add New> at the top of the
locate items more easily, consider designing a hierarchy of “Subitem of” list, and then jump back to step 3 to begin the
higher-level items (parents) and one or more levels of parent-creation process.
subitems. 6. Complete the other fields as described in the
For example, a landscaping business might create top-level following sections for the type of item you’re creating.
items for trees, shrubbery, cacti, and flower bulbs. Within the
QuickBooks will use the info you enter to fill in these fields on Service Items with Associated Costs
sales and purchase forms. For example, it uses the sales price If you sell services that have associated costs, such as when
you enter here on invoices when you sell some units. If the you hire someone else to perform those services, you have to
sales price changes each time, simply leave the item’s sales set up the Service item to include those costs.
price field (which is labeled Rate, Price, or Sales Price The key to displaying the fields you need to fill in is the “This
depending on the type of item and the item’s settings) set to service is used in assemblies or is performed by a
zero. That way, QuickBooks doesn’t fill in a price, so you can subcontractor or partner” checkbox. In addition to the basics
type one in each time you sell the item. (Even if you set a like Item Name/Number and “Subitem of,” here are the fields
value for an item, you can overwrite it whenever you use that you fill in when an item does have associated costs:
item on a sales form.) Description on Purchase Transactions. Type in the
7. If you have additional items to create, click Next to description that you want to appear on the purchase orders
save the current item and start another. If you want to you issue to subcontractors or vendors and the bills you record
in QuickBooks to go with the ones you receive from vendors.
save the item you just created and close the New Item Cost. Enter what you pay for the service, which can be an
window, click OK. hourly rate or a flat fee. For example, if a subcontractor
If you’ve made mistakes in several fields or need more performs the service and receives P175 for each hour of work,
information before you can complete an item, click Cancel to type 175 in this field. If the cost varies, leave this field set to
throw away the current item and close the New Item window. 0; you can enter the actual cost when you create a purchase
Service Items order.
Expense Account. Choose the account where you want to
Services are intangible things you sell, like time or the output
post what you pay for the service. If a subcontractor does the
of your brain. For example, you might sell consulting services,
work, choose a Cost of Goods Sold account or an expense
Internet connection time, haircuts, or tarot card readings. In
account for subcontractor or outside consultants’ fees. If a
construction, services could represent phases of construction,
partner or owner performs the work, choose a Cost of Goods
which makes it easy to invoice customers based on progress
Sold account or an expense account for service-related costs.
and to compare actual values with estimates.
Preferred Vendor. If you almost always use the same vendor
Suppose you run a telephone answering service. You earn
for a service, choose that vendor in this drop-down list. That
income when your customers pay you for the service. You pay
way, if you don’t select a vendor when you create a purchase
salaries to the people who answer the phones, regardless of
order, QuickBooks selects that vendor when you add this
whether you have two service contracts or 20. For this
Service item. However, if you purchase the item from several
business, you earn income with your service, but your costs
vendors, leave this field blank.
don’t link to the income from specific customers or jobs.
Description on Sales Transactions. This field appears on
On the other hand, in some companies, such as law practices,
sales forms like invoices and sales receipts. QuickBooks
the partners get paid based on the hours they bill, so the
automatically copies the text from the Description on Purchase
partners’ compensation is an expense associated directly with
Transactions box into this field, but if your vendors use
the firm’s income. Services that you farm out to subcontractors
technical jargon that your customers wouldn’t recognize, you
work similarly. If you offer a 900 number for gardening advice,
can change the text in this box to something more meaningful.
you might have a group of freelancers who field the calls and
Sales Price. Type in how much you charge customers for the
whom you pay only for their time on the phone. In these
service, as you would in the Rate field for a Service item that
scenarios, you still earn income for the service you sell, but
you don’t purchase from someone else.
you also have to pay the law-practice partners or the
Tax Code. Most Service items are nontaxable, so you’ll choose
subcontractors who do the work. The partners’ or
Non here most of the time. (This field appears only if you’ve
subcontractors’ cost relates to the income for that service.
turned on the QuickBooks sales tax feature.)
The mighty Service item single-handedly manages all types of
Income Account. Choose the income account to which you
services, whether you charge by the hour or by the service,
want to post the income for this service, whether it’s a catchall
with or without associated expenses. Conveniently, QuickBooks
income account for all services or one you created specifically
displays different fields depending on whether a service has
for this type of service.
costs associated with income. This section describes the fields
you fill in when creating Service items.
Service Items Without Associated Costs Product Items
Here’s how the fields in the New Item window work when Products you sell to customers fall into three categories: 1.)
you’re creating a Service item that doesn’t include purchasing ones you keep in inventory, 2.) ones you special order, and 3.)
services from someone else (that is, when you leave the “This ones you assemble. QuickBooks can handle inventory as long
service is used in assemblies or is performed by a as your company passes the tests on when to track inventory.
subcontractor or partner” checkbox turned off: Likewise, products you purchase specifically for customers or
Description. Type a detailed explanation of the service in this jobs are no problem. But to handle products you assemble like
box. This text appears on invoices and sales forms, so use gift baskets or gizmos made from widgets, you’ll need
terms that your customers will understand. Rate. Type how QuickBooks Premier or Enterprise edition (which include
much you charge customers for the service. You can enter a Inventory Assembly items.
flat fee or a charge per unit of time. For example, you might This section describes the three types of product items that
charge P9.95 per call, charge by the minute, or charge P200 QuickBooks offers and shows you how to fill in the New Item
for unlimited calls each month. When you add the item to an window’s fields for Non-inventory Part items. Choose one of
invoice, QuickBooks multiplies the quantity by the sales price these three QuickBooks item types for the products you sell:
to calculate the total charge. Non-inventory Part. If you purchase products specifically for
If the item’s cost varies, leave the Rate set to 0; you can then a job or customer and don’t track how many products you
enter the price when you create an invoice or other sales form. have on hand, use Non-inventory Part items. Unlike Inventory
If the rate is often the same, fill in the most common rate. Part items, this type has at most two account fields: one for
Then, when you add the item to an invoice, you only need to income you receive when you sell the part, and another for the
modify the rate when you want to use a different amount. For expense of purchasing the part in the first place.
services that carry a flat fee, use a quantity of 1 on your Inventory Part. Use this type for products you purchase and
invoices. keep in stock for resale. Retailers and wholesalers are the
Tax Code. Most Service items are nontaxable, so you’ll choose obvious examples of inventory-based businesses, but other
Non here more often than not. (This field appears only if types of companies like building contractors may track
you’ve turned on the sales tax feature.) inventory, too. With Inventory Part items, you can track how
Account. Choose the income account to which you want to many you have, how much they’re worth, and when you
post the income for this service, whether it’s a catchall income should reorder.
account for all your services or one you created specifically for
this type of service. Inventory Assembly. This item type (available only in
QuickBooks Premier and Enterprise editions) is perfect when
you sell products built from your inventory items. For example, purchases and sales as you do for Service and Non-inventory
say you stock wine bottles and related products like Part items.
corkscrews and glasses, and you assemble them into gift A charge without associated expenses. You can create
baskets. With an Inventory Assembly item, you can track the charges that don’t link directly to expenses by leaving the “This
number of gift baskets you have on hand as well as the item is used in assemblies or is a reimbursable charge”
individual inventory items that go into them. You can also checkbox turned off. You can then create a percentage-based
assign a different price to the gift basket than the total of the charge, which is useful for calculating shipping based on the
individual products. value of the products being shipped. With the checkbox turned
Non-Inventory Part Fields off, instead of the Cost and Sales Price fields, you see the
You’ll need Non-inventory Part items if you use purchase “Amount or %” field. If you want to create a charge for a
orders to buy supplies or other products that you don’t track as specific amount (like the value for a country club’s one-time
inventory. For example, suppose you’re a general contractor initiation fee), type a whole or decimal number in this field. To
and you buy materials for a job. When you use Non-inventory create a percentage-based charge, type a number followed by
Part items, QuickBooks posts the cost of those products to an “%,” such as 10%, in this field instead.
expense account (or Cost of Goods Sold account) and the
income from selling them to an income account. You don’t Subtotal
have to bother with an inventory asset account because you You’ll need a Subtotal item if you discount only some of the
transfer ownership of these products to the customer almost items on a form or calculate shipping based on the value of the
immediately. order. You need to create only one Subtotal item in
The good news is that Non-inventory Part items use all the QuickBooks, because a Subtotal item does just one thing:
same fields as Service items, although there are a few subtle totals all the amounts of the preceding lines up to the last
differences you need to know. Take the following disparities subtotal or the beginning of the invoice. That means you can
into account when you create Non-inventory Part items: add more than one subtotal to an invoice. For example, you
This item is used in assemblies or is purchased for a can use one Subtotal item to add up the services you sell
specific customer:job. This checkbox goes by a different before applying a preferred-customer discount, and a second
name than the one for Service items, but its effect is the same. Subtotal item for product sales when you have to calculate
Turn it on when you want to use different values on purchase shipping.
and sales transactions for items you resell. When this checkbox Because you can’t change a Subtotal item’s behavior, Subtotal
is on, QuickBooks displays Purchase Information and Sales items have just two fields: Item Name/Number and
Information sections. For Non-inventory Part items, choose Description. You can type any name and description you wish
income and expense accounts you set up specifically for in these fields, but in practically every case, Subtotal says it all.
products. Group
Group items are great timesavers, and they’re indispensable if
If the Non-inventory Part item is for office supplies (or other you tend to forget things. As the name implies, a Group item
items you don’t resell) that you want to place on a purchase represents several related items you often buy or sell together.
order, then leave this checkbox off because you won’t have Create a Group item that contains items that always appear
sales values. Read on to find out what happens when you turn together, such as each service you provide for a landscaping
off this checkbox. job. That way, when you add the Landscaping Group item to
Account. If you don’t resell this product, leave the “This item an invoice, QuickBooks automatically adds the Service items
is used in assemblies or is purchased for a specific for the various phases, such as Excavation, Grading, Planting,
customer:job” checkbox turned off, and you’ll see only one and Cleanup. You can also use a Group item to show or hide
Account field. QuickBooks considers the account in this field the underlying items, which is useful when you create fixed-
the expense account for the purchase. price invoices and don’t want the customer to see the
Tax Code. This field works exactly the same way as it does underlying details.
for a Service item. Choose Non if the products are nontaxable Here’s how you fill in the fields in the New Item window for a
(like groceries), and Tax if they’re taxable. (This field appears Group item:
only if you’ve turned on the QuickBooks sales tax feature. Group Name/Number. Type a name for the group that
gives a sense of the individual items within it, such as Security
Other Types of Items Package.
Description. Type the description that you want to appear on
If a line on a sales form isn’t a service or a product, read this
sales forms.
section to figure out the type of item you need.
Print items in group. To show all the underlying items on
Other Charge your invoices, turn on this checkbox.
The Other Charge item type is aptly named because you use it Item. To add an item to a group, click a blank cell in the Item
for any charge that isn’t quite a service or a product, like column and then choose the item you want. You can also
shipping charges, finance charges, or bounced-check charges. create a new item by choosing <Add New> from the drop-
Other Charge items can be percentages or fixed amounts. For down list.
example, you could set up shipping charges that are the actual Qty. Group items can include different quantities of items, just
cost of shipping, or calculate shipping as a percentage of the like a box of notecards usually includes a few more envelopes
product cost. than cards. For each item in the group, type how many you
If customers hold back a percentage of what they owe until typically sell as part of that group. If the quantity of each item
you complete their jobs satisfactorily, create an “Other Charge” varies, type 0 in the Qty cells. You can then specify the
item for the retainer (the portion of your fee that the customer quantities on your invoices after you add the Group item.
doesn’t initially pay). Then, when you create the invoice, enter
a negative percentage so QuickBooks deducts the retainer
Discount
from the invoice total. When your customer approves the job,
As you know, a discount is an amount you deduct from the
create another invoice, this time using another Other Charge
standard price you charge, such as a volume discount,
item named Retention, to charge the customer for the amount
customer-loyalty discount, or sale discount. QuickBooks’
she withheld.
Discount item calculates deductions like these. Discount items
Other Charge items can be linked to expenses—or not. Here
deduct either a dollar amount or a percentage for discounts you
are your options:
apply at the time of sale. By using both Subtotal and Discount items,
A charge linked to expenses. For Other Charge items, the
you can apply discounts to some or all of the charges on a sales
checkbox for hiding or showing both purchase and sales fields
form.
is labeled “This item is used in assemblies or is a reimbursable
charge.” Turn on this checkbox when you want to set the Cost The New Item window’s fields for a Discount item are similar
field to what you pay and the Sales Price field to what you to those of an Other Charge item with a few small differences:
charge your customers. You’ll see the same sets of fields for Amount or %. To deduct a dollar amount, type a positive
number (whole or decimal) in this field. To deduct a
percentage, type a whole or decimal number followed by “%,” Charge items to other item types, and you can change them
like 5.5%. only into certain other item types: Service, Inventory Part,
Account. Choose the account to which you want to post the Inventory Assembly (available only in QuickBooks Premier and
discounts you apply. You can post discounts to either an Enterprise), Non-inventory Part, or Other Charge. For example,
income or expense account. When you post discounts to an you can’t change a Non-inventory Part item back once you
income account, they appear as negative income, so your change it to an Inventory Part item. To prevent type-change
gross profit reflects what you actually earned after deducting disasters, back up your QuickBooks file before switching item
them. Posting discounts to an expense account, on the other types.
hand, makes your income look better than it actually is, but Hiding Items
the discounts increase the amount in your expense account, so Hiding items and deleting them are two totally different
your net profit is the same no matter which approach you use. actions, although the visible result is the same: QuickBooks
doesn’t display the items in the Item List window or in item
Tax Code. Most of the time, you choose a taxable code in this drop-down lists, which prevents you from selecting them
field (which appears only if you have the program’s sales tax accidentally and keeps your Item List more concise. But unlike
features turned on) so that QuickBooks applies the discount deleting (which you’ll learn about in a sec), hiding is reversible:
before it calculates sales tax. For instance, if customers buy You can switch items back to active status if you start selling
products on sale, they pay sales tax on the sale price, not the them again. Suppose you hid the item for bell-bottom hip-
original price. If you choose a nontaxable code in this field, huggers in 1974. Decades later, now that ‘70s fashions have
QuickBooks applies the discount after it calculates sales tax. become cool again, you can reactivate that item and use it on
You’ll rarely want to do this, though, because it means you’ll sales forms. (Of course, you’ll probably want to edit the cost
collect less sales tax from customers than you have to send to and sales price to reflect today’s economy.)
the tax agencies. If you’ve sold an item in the past, then the only way to remove
it from the Item List is to hide it—QuickBooks won’t let you
Payment delete items that have transactions associated with them.
When customers send you payments, you can record them in Here’s a guide to hiding and reactivating items:
QuickBooks using the Receive Payments feature. But if you’re Hide an item. In the Item List, right-click the item and
in the middle of creating invoices when the checks arrive, you choose Make Item Inactive from the shortcut menu. The item
can avoid that task by recording those payments right in your disappears from the list.
invoices by adding a Payment item. Payment items do more View all items, active or inactive. At the bottom of the
than just reduce the amount owed on the invoice. Item List window, turn on the “Include inactive” checkbox.
In the New Item window, after you fill in the Type, Item (This checkbox is grayed out when all your items are active.)
Name/Number, and Description fields, the remaining Payment QuickBooks then displays a column with an X as its heading
item fields are unlike those for other items. These unique fields and shows an X in that column for every inactive item in the
tell QuickBooks the method of payment that the customer used list.
and whether you deposit the funds in a specific bank account Reactivate a hidden item. First, turn on the “Include
or group them with other undeposited funds. Here are the inactive” checkbox to display all items. Then click the X next to
details: the name of the item you want to reactivate. When you click
Payment Method. Choose a method such as cash, check, or the X next to a parent item, QuickBooks opens the Activate
a brand of credit card. That way, when you choose Group dialog box. If you want to reactivate all the subitems as
Banking→Make Deposits to make a deposit and the “Payments well as the parent, click Yes; to reactivate only the parent
to Deposit” window opens, you can filter pending deposits by item, click No.
payment method.
Group with other undeposited funds. Choose this option if Deleting Items
you want to add the payment to other payments you’ve The only time you’ll delete an item is when you create it by
received. For example, choose this option if you save up the mistake and want to eliminate it permanently. You can delete
checks customers send so you can make one trip to deposit an item only if it doesn’t have any transactions associated with
them all in your bank. That way, when you add this Payment it.
item to a sales form, QuickBooks adds the payment to the list If you erroneously create an item and catch your mistake
of undeposited funds. immediately, deleting the offender is no sweat. Open the List
Item window (Lists→Item List), and then use one of these
To actually complete the deposit of all your payments, choose methods:
Banking→Make Deposits. • • Select the item, and then press Ctrl+D. • Right-click
Deposit To. If payments flow into an account without any the item, and then choose Delete Item from the shortcut
action on your part, such as credit card or electronic payments, menu.• Select the item, and then head to the main QuickBooks
choose this option, and then choose the appropriate bank menu bar and choose Edit→Delete Item. • At the bottom of the
account in the drop-down list. Item List window, click Item→Delete Item. If you try to delete
Working with Items an item that’s used in even one transaction, QuickBooks warns
you that you can’t delete it. Say you created an item by
Item info changes from time to time: Prices increase or
mistake and then compounded the problem by inadvertently
decrease, descriptions change, or you decide to use different
adding the item to an invoice. When you realize your error and
accounts. You can make changes like this anytime. In addition,
try to delete the item, QuickBooks refuses to oblige.
you can hide items so only the ones you currently sell appear
Fortunately, it’s pretty easy to run a report to find the
in item drop-down lists. And if you created an item by mistake,
transactions that contain that item, and then replace it with
you can delete it to remove it permanently. This section
another item: 1. Open the Item List window (Lists→Item
explains how to perform all these tasks.
List), and then right-click the item and choose
Modifying Items “QuickReport: [item name]” from the shortcut menu.
You can change information about an item even if you’ve QuickBooks opens the Item QuickReport window. Depending
already used it in transactions. The changes you make don’t on how your report preferences are set, the Modify Report
affect existing transactions, but when you create new dialog box might open as well. 2. If the Modify Report dialog
transactions using that item, QuickBooks uses the updated box appears, then on the Display tab, choose All at the top of
info. the Dates drop- down list, and then click OK. If the Modify
In the Item List window (Lists→Item List), double-click the Report dialog box doesn’t appear, in the Item QuickReport
item you want to edit, and QuickBooks opens the Edit Item window, choose All in the Dates drop-down list. 3. In the
window. Simply make your changes, and then click OK. If you report window, double-click the transaction, and then
want to modify several items at once, use the Add/Edit edit the transaction to remove the erroneous
Multiple List Entries feature instead.
Be particularly attentive if you decide to change an item’s Type
field. You can change only Non-inventory Part and Other
item.
QuickBooks opens the dialog box or window that corresponds
to the type of transaction you double-clicked. For example, if
you double-click an invoice, QuickBooks opens the Create
Invoices window and displays the invoice you chose. In the
Create Invoices window’s Item column, click the cell containing
the item you want to delete, click the down arrow in that cell,
and then choose the replacement item from the Item drop-
down list.
4. To save the transaction with the revised item, click Save &
Close.

The transaction window closes.

just made. You’ll know that you’ve successfully eliminated the

QuickBooks takes you back to the Item List window.

message box that appears, click OK to confirm that you