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About item types

item

item setup

What is an item?

In QuickBooks, an item is anything that your company buys, sells, or resells in the course of business, such as products, shipping and handling charges, discounts, and sales tax (if applicable). You can think of an item as something that shows up as a line on an invoice or other sales form.

Items help you fill out the line item area of a sales or purchase form quickly. When you choose an item from your Item List, QuickBooks fills in a description of the line item and calculates its amount for you.

QuickBooks provides 11 different types of items. Some—such as the service item or the inventory part item—help you record the services and products your business sells. Others—such as the subtotal item or discount item—are used to perform calculations on the amounts in a sale.

Note: Retail businesses: Set up your items according to how you enter your sales, either every sale or sales summaries.

What is the relationship between items and income accounts?

Items handle the behind-the-scenes accounting. When you create an item for a service or product you sell, you associate it with an income account. When the item is used on a form or register, it posts an entry to that income account and another entry to Accounts Receivable or another appropriate account.

What item types are available in QuickBooks?

item

QuickBooks provides several item types to help you fill out sales and purchase forms quickly.

For details about how to set up an item, click the item type in the table.

Use this type

For

Service

Services you charge for or purchase. Examples include specialized labor, consulting hours, and professional fees.

 

Inventory part

Goods you purchase, track as inventory, and resell.

Inventory assembly
(Premier and Enterprise editions only)

Assembled goods you build or purchase, track as inventory, and resell. Note: QuickBooks cannot track the costs associated with the manufacturing process itself. In other words, the cost of a built assembly item depends only on the cost of its components.

 

Non-inventory part

Goods you buy but don't track (such as office supplies), or materials you buy for a specific job that you charge back to your customer.

 

Fixed asset

An asset you do not expect to convert to cash during one year of normal operations. A fixed asset is usually something that is necessary for the operation of your business—such as a truck, cash register, or computer.

 

Other charge

Miscellaneous labor, material, or part charges such as delivery charges, setup fees, and service charges, bounced checks, late fees, opening balance, reimbursable expenses, retainers, surcharges, gift certificates, prepayments, retainers, sales tax, and shipping and handling fees.

 

Subtotal

Totals all items above it on a form, up to the last subtotal. Useful for applying a percentage discount or surcharge to many items.

 

Group

A way of associating individual items that often appear together on invoices, purchase orders, and so on, so that all items in the group can be added to the form at one time.

What's the difference between an inventory assembly and a group? (QuickBooks Premier or Enterprise editions only)

 

Discount

Subtracts a percentage or fixed amount from a total or subtotal. Do not use this item type for an early payment discount.

 

Payment

Records a partial payment you received at the time of the sale. It reduces the amount owed on an invoice.

 

sales tax item

Calculates a single sales tax item at a specific rate that you pay to a single tax agency.

 

Sales tax group

Calculates and individually tracks two or more sales tax items that apply to the same sale. The customer sees only the total sales tax.

See also

QuickBooks items represent everything that can be a line item on a sale or purchase form-for example, services and products you sell, things you buy, discounts you offer, and assets you own. You use items when you create invoices, fill out checks, create purchase orders, or buy new equipment.

While they provide a quick means of data entry, a much more important role for items is to handle the behind-the-scenes accounting. When you create an item, you link it to an account; when the item is used on a form, it posts an entry to that account and another entry to the appropriate accounts receivable, accounts payable, checking, fixed asset, or other account.

While items are easy to set up, you should spend some time deciding how they can best work for you before you start setting them up and using them. Use your current list of services and products as a starting point. Consider how much detail you want on your invoices or statements and set up your items with that level of detail in mind. For example, if you are a seamstress who creates and sells home accessories, you can set up a single item and charge a flat rate for a certain size of couch pillow, or you can break that pillow down further into labor and materials.

If you're a QuickBooks Pro user, you can't create new inventory assembly items. You can view and edit inventory assembly items from the Item list in any edition of QuickBooks, and you can also view and edit the transactions that use them. If you want to do more with inventory assembly items, learn how to upgrade your version of QuickBooks.

See also

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