Setting Up Inventory in QuickBooks 2014

Setting Up Inventory in QuickBooks 2014: Video

This video shows setting up inventory in QuickBooks 2014 within a company file. Click here for the complete training tutorial!

Setting Up Inventory in QuickBooks 2014: Overview

For many companies, inventory is enabled if you create your company file using the “EasyStep Interview.” However, if you did not enable inventory when you created your company file, you can enable it at a later point in time. You can enable inventory within your company file and view the default inventory preferences, by selecting “Edit| Preferences…” from the Menu Bar. In the “Preferences” dialog box, select “Items & Inventory” from the scroll box at the left side of the window. To the right, click the “Company Preferences” tab and make sure the “Inventory and purchase orders are active” checkbox is selected in order to enable inventory-related features in your QuickBooks company file. Then set any additional default settings needed for inventory and items. Click “OK” to set your default inventory preferences.

If inventory is enabled, QuickBooks uses the average cost method to determine the value of inventory. QuickBooks cannot use FIFO or LIFO methods. The average cost of the inventory equals the total cost of the items currently in stock, divided by the number of items in stock. With QuickBooks, you can track the number of items in stock and the value of your inventory after every purchase and sale. As you order, receive, and sell inventory items, QuickBooks records each inventory-related transaction and adjusts the inventory quantity and value accordingly.

In order to track inventory, you must enter each item that you want to track as an “Inventory Part” within the Item List. QuickBooks tracks the quantity and value only for “Inventory Part” items within the Item List as you sell or reorder the items. You use the Item List to add, edit, delete, and inactivate inventory part items. You can display the Item List by selecting “Lists| Item List” from the Menu Bar.