Preferences

The first step in setting up the inventory tracking system in QuickBooks is to confirm that the preference to permit the use of inventory and purchase orders has been turned on.  If the preference has not been turned on, the inventory type option will not be visible when a new item is created.  Another way to tell if the preference has been turned on is to look at the pull down menu under Vendor and see if there are choices of inventory activities and purchase orders.

There is a Purchases & Vendor preference that is important when setting up Accounts Payable if inventory, purchase orders, and sales orders will be used.

QBRA-2003: Edit > Preferences > Purchases & Vendors > Company Preferences

Inventory and purchase orders are active

If this option is not turned on, the inventory type item will not be available for creating a new item.  The purchase order option will not be available from the vendor pull down either.

Warnings

It is the opinion of this author that the warnings should be left on to alter the user to a possible problem with the data entry.  These three warnings are no any different.  The warning about "not enough inventory" to sell is very important because QuickBooks uses average cost.  Typically if the warning appears that means that there is a problem with using proper procedures.  Proper procedures will be addressed in the inventory section of these materials.

Bill Due Date

The default for the "bills due in" date is 10 days.  This is the number of days that a bill will be due in if specific terms have not been entered.  For example, if a bill is entered with a transaction date of August 1, 2003, it would be due on August 11, 2003.  Typically, in lieu of specific payment terms, the assumption is that the bills will be due in 30 days.  Changing the number of days here will update the default for all new transactions entered.  The specific terms can be set up as each vendor is entered.  The other alternative is that the terms can be entered on the bill and the software will ask as the bill is saved if the vendor should be updated to reflect the new terms.

Automatically Use Discounts and Credits

New with Version 2001, when this preference is checked (by default it is not checked) any discounts or credits will be automatically applied, as opposed to the user manually applying any applicable discounts or credits.  In some industries there are standard terms that have discounts so the feature is a great time saver.  For other businesses, the choice is to retain control of what discounts are taken and how credits are applied by leaving the preference unchecked.

  TIP: While in the preference section, it is useful to confirm that the Company Preferences for Customers & Sales and Sales Tax preferences have been set properly.

There is a Purchases & Vendor preference that is important when setting up Accounts Payable if inventory, purchase orders, and sales orders will be used.

QBRA-2003: Edit > Preferences > Purchases & Vendors > Company Preferences

Inventory and purchase orders are active

If this option is not turned on, the inventory type item will not be available for creating a new item.  The purchase order option will not be available from the vendor pull down either.

Warnings

It is the opinion of this author that the warnings should be left on to alter the user to a possible problem with the data entry.  These three warnings are no any different.  The warning about "not enough inventory" to sell is very important because QuickBooks uses average cost.  Typically if the warning appears that means that there is a problem with using proper procedures.  Proper procedures will be addressed in the inventory section of these materials.

Bill Due Date

The default for the "bills due in" date is 10 days.  This is the number of days that a bill will be due in if specific terms have not been entered.  For example, if a bill is entered with a transaction date of August 1, 2003, it would be due on August 11, 2003.  Typically, in lieu of specific payment terms, the assumption is that the bills will be due in 30 days.  Changing the number of days here will update the default for all new transactions entered.  The specific terms can be set up as each vendor is entered.  The other alternative is that the terms can be entered on the bill and the software will ask as the bill is saved if the vendor should be updated to reflect the new terms.

Automatically Use Discounts and Credits

New with Version 2001, when this preference is checked (by default it is not checked) any discounts or credits will be automatically applied, as opposed to the user manually applying any applicable discounts or credits.  In some industries there are standard terms that have discounts so the feature is a great time saver.  For other businesses, the choice is to retain control of what discounts are taken and how credits are applied by leaving the preference unchecked.

  TIP: While in the preference section, it is useful to confirm that the Company Preferences for Customers & Sales and Sales Tax preferences have been set properly.

QBRA-2003: Edit > Preferences > Purchases & Vendors > Company Preferences

Inventory and purchase orders are active

If this option is not turned on, the inventory type item will not be available for creating a new item.  The purchase order option will not be available from the vendor pull down either.

Warnings

It is the opinion of this author that the warnings should be left on to alter the user to a possible problem with the data entry.  These three warnings are no any different.  The warning about "not enough inventory" to sell is very important because QuickBooks uses average cost.  Typically if the warning appears that means that there is a problem with using proper procedures.  Proper procedures will be addressed in the inventory section of these materials.

Bill Due Date

The default for the "bills due in" date is 10 days.  This is the number of days that a bill will be due in if specific terms have not been entered.  For example, if a bill is entered with a transaction date of August 1, 2003, it would be due on August 11, 2003.  Typically, in lieu of specific payment terms, the assumption is that the bills will be due in 30 days.  Changing the number of days here will update the default for all new transactions entered.  The specific terms can be set up as each vendor is entered.  The other alternative is that the terms can be entered on the bill and the software will ask as the bill is saved if the vendor should be updated to reflect the new terms.

Automatically Use Discounts and Credits

New with Version 2001, when this preference is checked (by default it is not checked) any discounts or credits will be automatically applied, as opposed to the user manually applying any applicable discounts or credits.  In some industries there are standard terms that have discounts so the feature is a great time saver.  For other businesses, the choice is to retain control of what discounts are taken and how credits are applied by leaving the preference unchecked.

  TIP: While in the preference section, it is useful to confirm that the Company Preferences for Customers & Sales and Sales Tax preferences have been set properly.

List Limits Expanded

For most QuickBooks users, the list limit for the QuickBooks Pro and Premier products of 14,500 is sufficient.  For some, however, that is not the case.  We have been seeing increased list size for a variety of reasons.  One of the most common is the increased number of customers as the result of web site sales.  For version 6 and prior, the list limit was doubled for the Enterprise Solutions Product.  New with version 7, the Enterprise Solutions limit has been removed.

More information on this topic

Purchases and Vendors

Items