Hello Community! Here at QuickBooks, we know that setting up your account correctly is an integral part of a successful business. Im dedicating this article to your lists: products and services, customers, and vendors.
Our first stop is adding Products and Services to your account. Although different, both represent something you sell to customers. To make things nice and easy, you create them both using nearly identical workflows.
When you create a new product or service item, you have four types to choose from: inventory, non-inventory, service, and bundle.
If you dont plan on tracking inventory quantities, you can create lists using non-inventory or service items. Bundles let you package and sell multiple items as a single product or service. Inventory tracking, as the name implies, tracks exact quantities of products on hand.
QuickBooks Online has great advanced features that can help you better manage your stock, but they arent required for a basic setup. You can definitely use non-inventory items for product sales, just know that QuickBooks will not track quantities. If you decide to enable inventory at a later date, you will have to reclassify qualified non-inventory items.
To create a new product or service item, navigate to the Invoicing tab, go to the Products and Services sub-tab, and select New.
Alternatively, you can select +Add New from a sales form. This will take you to the same page.
If you create new items directly from sales forms, fill in as much information as possible. Enter all necessary information into QuickBooks before you start adding them to invoices.
If you charge different rates for services, you can leave the sales price/rate data field blank. This can be added once youre filling out the invoice.
Take note of the section for Income Account. The account you select is what QuickBooks will use to categorize income once a sale is complete.
OK now switching gears. Arguably the most important list is your customers list. Creating and organizing your customer list is a very similar process and as always, our goal is to make it a piece of cane. Thats why information from customer profiles will automatically populate the data fields on invoices and sales forms.
You can add customers directly from sales forms too. When you use this method, we highly recommend clicking the + Details button and filling out their complete customer profile before sending.
Lets take a closer look at the Customer Information page.
- You can personalize the Display name that appears on customer sales forms and emails. Utilizing this adds a personal touch to your business communications
- The sub-customer option is a less common but convenient feature that lets you invoice a customer with multiple businesses. You can track income collectively and for specific businesses or locations.
- The tabs in the bottom left corner lend themselves to all sorts of great personalization. Besides the address, you can include notes about your customer, any attachments youve sent them, and tax information if they qualify for exemptions. These features help you take care of specific customers with particular requests, such as those who still prefer paper invoices in the mail.
Lastly, If you click on a customer from the Customer List page [Invoicing>>Customers], you can see all of their historical transactions. Pay extra attention to the status column to see that youve sent and settled invoices and payments as needed.
And the final section on my list are our wonderful Vendors. Youll find them in Expenses>>Vendors on the left menu.
The Vendors List is virtually identical to the Customer List in functionality, so most of what you learned in the section above will be the same here. You add new vendors and manage lists the same way you do for customers, directly on expense forms or from the Vendors sub-tab in the Expenses Tab.
There is one very important distinction between the customer and vendor lists: you can elect to track a vendor for 1099s if they work for you as an independent contractor. This can be enabled when you create a new vendor account or edit an existing one.
If you decide to designate a vendor as an independent contractor [and you plan to file a 1099-MISC], youll need to create a separate expense account. This is so you can track payments associated with that labor and distinguish their expenses from your regular employees. This has important compliance implications, so when youre ready to take this step, please read How to Set Up Contractors and track them for 1099s in QuickBooks."
Ill leave you with some helpful videos on these lists as well:
By now, youre an expert at managing lists. Once you have the process down, adding new customers, vendors, and products & services will feel second nature. And as always, the COmmunity is here for any questions you have along the way.