This tutorial covers numerous options for displaying and tracking products and services within QuickBooks Online. You’ll learn how to set options for displaying product/service information on sales forms and tracking product quantity and price. We’ll cover how to create a list of products and services for your company in a later tutorial, or you can skip ahead to How to Set Up the Products and Services List.
Thank you for taking the time to view this tutorial for QuickBooks Online, our best overall pick for small business accounting software. We recommend following along in your own QuickBooks company account. If you don’t already subscribe to QuickBooks, you have the choice of a 30-day free trial or 50% off for three months.
This tutorial is from our series of Free QuickBooks Tutorials. You can watch the video below or read the step-by-step instructions with screenshots. The video was made with a slightly older version of QuickBooks Online. While the process of setting product and service options is essentially unchanged, the layout of the screens are slightly different. The step-by-step instructions are from the most current version of QuickBooks Online.
The Importance of Setting Up Products and Services
It is important to set up the product and service options in QuickBooks Online if you plan to provide customers with an invoice or a sales receipt for products or services. These settings determine how much product and service information is included on all sales forms created in Quickbooks Online.
How to Set QuickBooks Online Product and Service Options
The product and service options are located in your company account and settings. Click on the cog wheel in the upper right corner of your dashboard and select Account and settings in the first column:
Then, select Sales from the left menu and click on Products and services. This shows the five options you need to set for your products and services:
1. Show Product/Service Column on Sales Forms in QuickBooks Online
This option will provide a column on all sales forms―including invoices, estimates, and sales receipts―that allows you to select from your list of products and services provided to customers. If you plan on utilizing a list of products and services, which I recommend highly, then you should have this option turned on.
Example: Paul of Paul’s Plumbing provides a variety of different types of plumbing services, from clearing residential toilet clogs to providing commercial kitchen sinks to brand new restaurants. Each different product or service that Paul provides is to be included in his products and services list. By turning this option on, Paul can select these products and services easily from his list when creating estimates, invoices, and sales receipts. We’ll cover how to create your products and services list in a later tutorial, How to Set Up the Products and Services List.
2. Show SKU Column in QuickBooks Online
A stock keeping unit (SKU) number is an alphanumeric code used for inventory tracking. By turning this option on, all sales forms will include a column for the SKU number. This is very convenient if you use SKU numbers but, otherwise, you should keep this option turned off.
Tip: SKU numbers are different than Universal Product Codes (UPCs) and are created by retailers for their specific inventory tracking needs. If you’re interested in learning how SKU numbers can help your business, read SKU Numbers: What They Are & How to Set Them Up.
3. Turn on Price Rules in QuickBooks Online
Price rules allow you to provide discounts for specific products to certain customers for a specified period of time. Price rules are very flexible and can be applied to all customers, select customers, or customer types. They can also be applied to all products and services, by product and service category, or to specific products or services.
Example: Paul’s Plumbing wants to offer homebuilders 10% off all faucet purchases for June. By creating a price rule, all June invoices to homebuilders for faucets will reflect the 10% discount automatically.
Tip: Price rules are a type of list in QuickBooks Online. To add new price rules, go to the gear icon and select All Lists in the second column. If you’ve turned on the price rules option, the Price Rules list will appear under Products and Services as shown below:
4. Turn on Quantity and Price Tracking in QuickBooks Online
If you carry an inventory of products, you must turn on this feature to add a quantity and rate field to the data input screen for invoices, estimates, and sales receipts. Without these fields, QuickBooks cannot properly track inventory quantity and cost. If you don’t want your customers to see the quantity and rate fields on their invoices and receipts, you can remove them as we learned in How to Customize Invoices.
5. Track Inventory Quantity on Hand in QuickBooks Online Products & Services Setup
If your business carries inventory, you’ll also need to turn on this feature. It will keep track of both the quantity and cost of the products you have in inventory. In addition to calculating the cost of your inventory sold, you’ll be notified of how many units of a product are available anytime you add a product to a sales form.
You should now understand the five options available for displaying and tracking product and service information in QuickBooks Online. The next tutorial in our QuickBooks Online Training Course is How to Set Up Messages in QuickBooks Online. That tutorial will teach you to customize the email messages that are sent with sales forms and how to send automatic payment reminders to your customers.