Whether you build houses, sell gardening tools, or tell fortunes on the Internet, you'll probably use items in QuickBooks. In QuickBooks, items are the products and services you sell. But to the program, things like subtotals, discounts, and sales tax are items, too. Nothing appears in the body of a QuickBooks sales form (such as an invoice) unless it's an item.
Put another way, when you want to create invoices (Chapter 8) in QuickBooks, you need customers and items to do so. So now that you've got your customers and your Chart of Accounts set up, it's time to dive into items.
This chapter begins by helping you decide whether you need items at all. But if your organization is like most and uses business forms such as invoices, sales receipts, and so on, you'll read the rest of the chapter to learn how to create, name, edit, and manage them.
For your day-to-day work with QuickBooks, items save time and increase consistency. Here's the deal. When you create an item, you specify its characteristics. The fields you fill in include what the item is, how much you pay for it, how much you sell it for, and the accounts to which you post the corresponding income and expense. For example, the bookkeeping service you provide might cost $75 an hour and you want the income to show up in your Financial Services income account. Then, when you add an item to a sales form, QuickBooks fills in the fields on the form with the information you stored in the item.
You can work out which accounts to assign items to on your own or with your accountant (a good idea if you're new to bookkeeping), and then specify the accounts in your items. QuickBooks remembers these assignments from then on, as illustrated in Figure 4-1.
Figure 4-1. Top: You'd be bound to make mistakes if you had to enter item details each time you added an entry to an invoice. By setting up an item with its associated details, you can make sure that you use the same information on sales forms each time you sell that item. Bottom: When the inevitable exception to the rule arises, you can edit the item fields that QuickBooks fills in. You can select portions of the text for replacement or click in the text to position the cursor.
When it's time to analyze how your business is doing, items shine. QuickBooks has built-in reports based on items, which show the dollar value of sales or the number of units of inventory you've sold. To learn how to use inventory reports, see page 402. For other item-based reports, read Chapter 19.
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