In this episode of the Mission Business Podcast, we share how QuickBooks can be used to track inventory and solutions to specific issues that inventory based businesses may face with QuickBooks.
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Full Transcript of Audio Below
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The Importance of Inventory Tracking
Interviewer: Welcome back to the show. Today, we are talking with Bernard again and I’d like to go over the types of things that QuickBooks can do for inventory-based businesses. I’m really hoping Bernard, that you can explain to us the importance of why you would want to track inventory in QuickBooks.
Bernard: Of course. First, you want to track inventory because inventory is a very valued asset.
- This is something you own and you want to be sure of what you have.
- Most importantly, you want to know how much you have so that when you have a customer order, you’re not going to be short of inventory.
- If you have an order and you can’t ship because you don’t have the product, then that’s a pure loss to you.
Conversely if you have too much inventory, then;
- You pay rent in a warehouse,
- The inventory gets to be dirty and obsolete, and
- You tend to be losing money
It is therefore very important to keep track of inventory, and QuickBooks is a great, great product to maintain what is called a perpetual inventory.
As you do your daily business in QuickBooks i.e you sell things, buy things; QuickBooks will automatically keep track of the quantities you have on hand and the value of your inventory.
Tracking Inventory in Different Locations
Interviewer: If you carry different types of inventory in a warehouse and in different locations, do you have to have a third-party software to track this and integrate that into QuickBooks?
Bernard: Usually not. QuickBooks has great in-depth inventory features. It does a lot of what you want to have done with inventory, especially for those businesses that have multiple locations or special needs such as keeping track of quantities by lot.
- Let’s say you are a food distributor or manufacturer, you may want to do a lot inventory or serial numbers.
- QuickBooks has a module called the Advanced Inventory that goes with Quick Enterprise that is really going to do a whole lot for you.
Generally speaking, unless you have a home-manufacturing operation that you want to account for, the QuickBooks inventory features will be very much sufficient for the great majority of our businesses.
What QuickBooks Features Are Needed?
Interviewer: Can we talk a little bit about different locations and how that might affect the ability to work with QuickBooks with different locations and keep track of that?
Bernard: Yes, you can. You must, however;
- Purchase the QuickBooks Enterprise version, which is a little bit more expensive; and not that much more expensive, and
- You need to subscribe to what is called the QuickBooks Advanced Inventory that has the multi-location feature.
Usually, if you’ve got multiple locations, the assumption is that your business will be a little bit bigger than just a mom-and-pop shop or a home-based business. It would therefore be natural to install QuickBooks Enterprise to use the QuickBooks Advanced Inventory.
How to Setup QuickBooks Inventory Tracking?
Interviewer: Is this something that’s fairly easy to setup for someone or does this take advanced knowledge and expertise?
Bernard: It is very easy to setup. It is like everything else; it might be deceptively easy.
- The QuickBooks software is easy to operate but generally speaking, we find that working with a QuickBooks Pro Adviser or seller is really beneficial to the use.
- We can’t really train and explain what the processes are and make sure that the users are using QuickBooks correctly; meaning receiving the inventory properly, setting-up the inventory list properly so that it all flows nicely and produces accurate results.
Interviewer: Wonderful. Thank you so much Bernard.
Bernard: You’re very welcome. Anytime.
We Are Happy To Help
You can contact us today to book a free consultation. We’d be happy to review your business’s inventory levels and then determine the best ways to use QuickBooks to consistently track inventory based on your business needs.
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