How to Enable Inventory Tracking in QuickBooks Online

How to Set Up Inventory Tracking in QuickBooks Online: Video Lesson

          This video lesson, titled “How to Set Up Inventory Tracking in QuickBooks Online,” shows you how to enable inventory tracking in QuickBooks Online. This video lesson is from our complete QuickBooks Online tutorial, titled “Mastering QuickBooks Online Made Easy.”

How to Enable Inventory Tracking in QuickBooks Online: Overview

            If selling products, you may need to track your inventory. To enable inventory tracking in QuickBooks Online, click the “Settings” button in the QuickBooks Online toolbar. Then click the “Account and settings” link under the “Your Company” heading in the drop-down menu to open the “Account and Settings” window.

            Click the “Sales” button in the menu at the left side of the screen. To the right, click the “Products and services” section to edit those settings. Then ensure the “Track quantity and price/rate” and “Track inventory quantity on hand” toggle switches in this section are set to the “On” position to enable inventory tracking.

            The first time you enable these settings, then also select the desired inventory costing method from the “Inventory valuation method” drop-down. Your choices are First In, First Out (FIFO) or Moving Average Cost (MAC). You cannot change the inventory valuation method for a company in QuickBooks Online after selecting a choice and saving it, so if this is important to your company, then please check with your accountant or financial advisor before selecting your choice.

            To track inventory for sales channels after setting up a sales channel, ensure the “Track inventory for sales channels” switch is set to the “On” position. When finished, click the “Save” button at the bottom of the section to save your changes. Then click the “Done” button in the lower-right corner of the window to close it.

            Enabling the “Track quantity and price/rate” toggle switch adds a “Quantity” and a “Rate” field to your sales forms. This lets you track this information for the products and services you sell. Enabling the “Track inventory quantity on hand” toggle switch lets you track the available stock of each product you sell. It also keeps track of related inventory costs for each item. This lets QuickBooks Online Plus automatically increase the quantity on hand of an item when you buy more. It also decreases the quantity on hand of items after making sales.