QuickBooks Online is popular among product-based business owners because of its robust inventory management features. Whether it’s tracking stock levels, managing purchases and sales, or generating insightful reports, QuickBooks Online has the tools you need to manage and track your stock.
Here are some best practices for effective inventory management in QuickBooks Online.
1. Ensure Accurate Data Entry
When adding products to your inventory in QuickBooks Online, ensure that all information, including product descriptions, SKUs, costs, and prices, is entered correctly. Any discrepancies you enter in the Product/service can lead to confusion and mismanagement.
Product/service information screen in QuickBooks Online
2. Categorize and Organize Products
Organize your products into categories and subcategories. This makes it easier to locate items and generate reports. QuickBooks Online allows you to set up custom categories to match your business’s specific needs.
3. Regularly Update Inventory Counts
Perform regular physical inventory counts to ensure that the quantities in your system match the quantities on hand. QuickBooks Online provides tools to help you adjust inventory levels based on your physical counts.
Adjust inventory quantity in QuickBooks Online
For a detailed explanation of how to adjust inventory levels in QuickBooks, read our guide to inventory management in QuickBooks Plus and Advanced.
4. Use Barcodes and Scanners
Integrate barcode scanning technology with QuickBooks Online to improve accuracy and efficiency. Scanning barcodes during receiving and sales processes reduces the likelihood of manual errors.
5. Set Reorder Points
Determine minimum inventory levels for each product to avoid stockouts. QuickBooks Online allows you to set reorder points, triggering purchase orders automatically when inventory falls below a specified threshold.
6. Streamline Purchasing
Create purchase orders directly within QuickBooks Online when inventory levels reach the reorder point. This reduces delays and ensures a consistent supply of products.
7. Vendor Management
Maintain accurate vendor information in QuickBooks Online. Establish strong relationships with suppliers to negotiate better terms and discounts. QuickBooks Online’s vendor center enables easy access to vendor details and purchase histories. Learn more about vendor management in QuickBooks Online Advanced.
Managing vendors in QuickBooks Online
8. FIFO Inventory Method
Use the First-In, First-Out (FIFO) inventory method in QuickBooks to ensure that the oldest inventory is sold first. QuickBooks Online supports FIFO tracking, providing accurate cost of goods sold calculations.
9. Analyze Sales Trends
Leverage QuickBooks Online’s reporting tools to analyze sales trends and identify top-selling products. This insight can guide purchasing decisions and promotional strategies.
10. Mobile Inventory Management
Utilize the QuickBooks Online mobile app to manage inventory on the go. This is particularly useful for businesses with multiple locations or mobile sales teams.
Poor inventory management can lead to stockouts, overstocking, increased holding costs, and customer dissatisfaction. By implementing best practices in inventory management, businesses can avoid costly mistakes and boost their profitability.