How to Set Up the Products and Services List in QuickBooks Online

hi this is tim yoder with fit small business today i'm going to teach you how to set up your product and services list in quickbooks online if you don't already have a subscription to quickbooks online you can get 50 off for three months by clicking the link below this video so let's get started setting up our products and services list the reason you want to set up the product and services list is it'll make it quicker to fill out your invoices and your purchase order forms because the description and price will automatically populate when you select the item second it allows quickbooks to track the quantity of your inventory as well as divide the cost of your inventory between your ending inventory on your balance sheet and the cost of goods you've sold during the year which appears on your income statement so that's a very important calculation so while i highly encourage you to create items for all of your income and expense items it's especially important to do it for inventory items again so quickbooks can track the quantity and allocate the costs between your ending inventory and your cost of goods sold so let's get started let's go to our left menu bar to sales and then products and services so here we can see our sample company paul's plumbing here is a list of their products and services they have already set up so there's two ways to enter products and services the first is the hard method the slower method and we're going to do that first so that you can become familiar with the fields that are required in quickbooks online then once we're familiar with the fields i'll show you how to import all of your items with one step from quickbooks from your excel spreadsheet so let's look at the columns here to get started so we can name our items whatever we would like to name them we can have subcategories so here for paul's plumbing they have bath vanity fixtures as kind of a main inventory category and beneath bath and vanity fixtures they have each of these different types of inventory now they name their inventory using some sort of code that they must be familiar with you don't have to use a code you can name them whatever makes sense to you to be able to identify products now you do want a separate inventory item for every different type of product so don't put red blocks with green blocks make one for red blocks one for green blocks you want to be as specific as possible in naming your inventory items now this means you're going to have a excessive amount of inventory items but that's okay and it's going to take some time to get them set up initially but once you do quickbooks online is going to be so much easier to use so i really encourage you to take a lot of time to get this items list set up properly it really is the backbone of quickbooks online so in addition to the name you can use a sku number if you use sku numbers you can enter them here the type of items there are three types of items there are inventory items these are products we buy and sell in which we keep some on stock these are the ones we need to keep track of the quantity both so we know how many we have on hand and we and again quickbooks online can allocate the cost between ending inventory and cost of goods sold second type are non-inventory items so these are still physical products that were buying sometimes we're selling them but we don't have to keep track of quantity so nuts and bolts we're not going to keep track of the quantity we're just going to buy them put them into our into our products and we're not necessarily going to show them as a separate line item on the invoice to the customer but we still want to keep track of them as a non-inventory product and then the third are services that we sell to our customers great so we can give a description of whatever makes sense to us this is this description is only for our internal use won't show up on purchase orders or invoices we can set a sales price this can always be changed whenever you create an invoice but we set the default sales price here we can set a default cost so when we order the item this cost will automatically populate on our purchase order or bill from the vendor but we can always change that we can decide whether we can indicate whether the product is subject to sales tax or not will keep the quantity on hand all automatically calculated when we enter a new product we can enter if we already have some of the product on hand our reorder point so notice this is kind of highlighted in in orange because we're low well it knows that we're low because we've said anytime it gets down to 100 units we need to order some more and so this is orange to tell us we need to order more okay so let's set up a new inventory item so let's scroll up just click the new button it'll give us our types we have inventory non-inventory and service like we talked about a fourth type is a bundle and a bundle is simply a combination of any of the other three that are frequently sold together so if you sell a sink and almost always comes with a half hour of labor then you can combine the sink inventory item with the half hour of service item and put that into a bundle so that when you bill it you can simply have one line item that covers both saves you a little bit of time okay so let's create an inventory item here we can give it whatever name we like we can upload a picture we can use sku numbers if we want if it's a sub product so again with paul's plumbing they have bath and vanity fixtures as kind of a main category of inventory and then they have a lot of sub products underneath that this is where we would indicate that it's a sub product we can assign it a class so this is not inventory specific if we want to with quickbooks online we can keep track of things in different classes so for instance you might have one for new products and ones for used products or one for for uh new buildings one for repairs and maintenance however your business wants to use classes they can and that can then be assigned to inventory items as well if you have an initial quantity on hand you want to enter it here if it's a new product so you don't have any on hand yet you want to make sure that you enter zero you're required to enter something there the as of date if it's a new item just make sure this as of date is prior to purchasing the item and then you can exp you can specify exactly when you want to reorder it so again the product we looked at was a hundred you can specify whatever quantity you want to be told that you need to reorder the item so all of our items we're going to select the items when we're creating invoices to customers as well as purchase order to vendors we need to tell quickbooks where we want these items mapped to on our chart of accounts so here we have our inventory item mapped to our inventory asset i encourage you to map all of your inventory items to the same inventory asset account people have kind of a people tend to create a lot of different inventory assets for different product categories or something that's unnecessary because with quickbooks you can print all sorts of detailed product reports so you don't need to show the detail of how much you have invested in different inventory items on your balance sheet it just clutters your balance sheet you're able to go and print reports specific for products so there's no reason to do this on your balance sheet so i encourage you to have all of your inventory products going to the same inventory asset account now here you can describe the product and this is the description that will actually show up on your sales forms so like your invoices notice this description in your name up here that's just whatever you want to call it this description is the one that's actually going to print on your sales forms you can specify a default sales rate again we need to map it map it to our chart of accounts so when we purchase the asset it's going to go to the inventory asset balance sheet account when we sell the asset it's going to go to our income statement account called sales of product income and i think that's a good account to have that in so we'll leave that this says it's going to be subject to sales tax so different sales tax laws apply around the whole country so you'll have to figure out what your jurisdiction is if you need to subject this sale to sales tax purchasing information so when you purchase it from a vendor this is the description that will show up on either your purchase order or if they send you a bill and you input the bill for later payment this is the description that will automatically pop up again you can always change it in that form but this will be the default you can set a default cost and here this is the last chart of account account that we need to to map this item to so again when we purchase the item it's going to go to the inventory asset account when we sell the item the sales price will go to the sales of product income and also when we sell the item the cost will move then from our inventory asset account to our cost of goods sold expense account so those are the three accounts we need to map our inventory items to great and if you want to specify a preferred vendor for this inventory item you can so you get those items in there once you're done click save and close so i didn't really put anything in here so i'm just going to close it without saving it great so that's your inventory asset the non-inventory items and the service items are very very similar the difference being you don't have to enter any quantity information or you can't enter any quantity information so if you need to keep track of quantity make sure you choose the inventory item okay great so that's the hard way of going about entering all of your product and service information but it's important you understand which each of those fields are so now let's go into how can we do this more quickly you can create an excel spreadsheet or a google sheet or a csv file with one line item for every product or service item that you want to create and then we can import them all at one time into quickbooks online so let's get started learning the import process so let's go up here to new but instead of clicking new click the drop down arrow and let's go to import so this brings up this very nice wizard that will walk you right through the process so you can either select a csv or excel file to upload from your computer or you can connect to a google sheet okay so let's just look at our google sheet here they give us a preview of a google sheet to see kind of how it should be formatted so in your first row you want to title each of your columns these titles don't have to be exactly like the field descriptions and quickbooks online but they should be at least accurate enough that you know exactly what is in each column so you title the columns with the fields that they're going to correspond to in quickbooks online then you put all of the information in here now you can import multiple times as long as you don't have any uh product names that are the same it won't cause any problems so if you want to do this for say 10 items just to make sure you're doing it correctly do that and then add your other hundreds of items perhaps at one time but obviously inputting into the spreadsheet is going to be much quicker than inputting into those screens that we've previously looked at okay so this is how your spreadsheet needs to be set up also um make sure your spreadsheet is on the first tab of your workbook right so with either excel or google sheets you look down at the bottom there's a bunch of tabs make sure that your information is only on the first tab quickbooks online automatically looks at that first tab there's no way to get it to look at the second tab okay so let's close our sample file here so i've already set up an excel file with my information so i'm going to browse for it and then upload it i hit browse here's my qbo products and services lists to import so i'm going to open that okay so there is my file now i'm going to click next now this second stage is where we map our data into quickbooks so these are all of those fields that we saw in that input screen so our product services name sku type sales description right these are all of those fields that were available in quickbooks online these are the fields available in our spreadsheet okay so we're just going to map from our fields to the quickbooks fields so go through here the income account there's no match for the income account we can look well i didn't specify an income account in my spreadsheet if you're going to want an income account you should specify you should create a new column in your spreadsheet try to make your spreadsheet obviously as complete as possible because you don't want to have to go back through hundreds of those input streams to change anything okay so once you're satisfied that all of your mapping is correct we can click next okay here is where you can make your final adjustments so again if you have hundreds of these products and services which even a very small company can have hundreds of these items you're going to want to make sure everything is correct in your spreadsheet before you get to this point because it's going to be quicker to do in your spreadsheet but this is where you can make your last adjustments so go through here make sure everything looks the way you want it and you can click import now if i click import it's not going to let me because these six items have already been imported but you'll click import you'll be done here tells me well we can't import it because your names these six names are the same okay also it's giving me uh errors here because i've specified quantities for service items you can only have quantities and for a non-inventory item you can only have quantities for you can only have quantities for uh inventory items so the inventory items have quantities so we're good okay good so you'll click import it'll bring it in and you'll be done i'm going to close out of here because it won't let me import them because i've already imported them before okay and there you go that's all that's to setting up your product and services list in quickbooks online so it's a long process but it is an incredibly important process so i highly encourage you to take time make sure that you do a complete job once you've started entering transactions you can't delete product and services items once you've made a transaction to that item it can no longer be deleted so again make sure you do this correct before you start using your quickbooks online well i appreciate you watching the tutorial today this is one of our 46 free quickbooks online tutorials you can view all of our tutorials by googling fit small business quickbooks online tutorials

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