Setting up items for tracking costs and revenues

Set up your service, non-inventory part, and other charge items to track the expenses you incur when you pay for them and the income you receive when you sell them. This lets you keep tabs on the profitability of the items — for example, you'll be able to prepare reports that compare income against expenses for each item.

To set up items for tracking costs and revenues:

  1. Choose Lists > Items.
  2. You can either edit an existing item or create a new one.
    • To edit an existing item, select the item and choose Edit from the Action pop-up menu ( image).
    • To set up a new item, choose New from the Action pop-up menu ( image). In the New Item window, choose one of these item types: Service, Inventory part, Non-inventory part, or Other charge.
  3. Specify that the item is both purchased and sold by selecting the appropriate checkbox.
    • For a Service item, select “This service is performed by a subcontractor.”
    • For a Non-inventory part, select “This item is purchased for and sold to a specific customer:job.”
    • For an Other charge, select “This is a reimbursable charge.”
  4. Enter descriptions for purchasing and sales. You may enter a different description for each if you wish.

    QuickBooks automatically fills in the description each time you enter a sales or purchase. You can change the description at that time if you want (your change affects only that transaction, not the item itself).

  5. Enter an expense account for tracking your costs for this item and enter an income account for tracking sales of this item.
  6. Enter your cost for the item and a sales price.
    • If you have set a standard markup percentage (choose QuickBooks > Preferences and then click Sales & Invoicing, and then enter a number for Default Markup Percentage), QuickBooks uses it to calculate the sales price when you enter the cost. If you want to set a different sales price for the item, simply type in a different amount.
    • If your costs vary, you may leave either or both prices as 0.00.
  7. (Optional) Enter a preferred vendor.
  8. To mark an item as inactive, select the Inactive checkbox. More info