23 Nov Proper Procedures Overview
Proper Procedures Overview
Prior to using the inventory feature, a decision needs to be made as to what the standard unit will be. For example: a piece or a case, an ounce or a pound or a ton, etc. QuickBooks tracks inventory as a unit in when purchased and a unit out when sold. If items are purchased by the case (i.e. 1 unit) and then sell them by the piece (maybe 12 units?) a change will need to be made or the inventory count and related cost will be negative when the entire case has been sold. To solve this problem, either purchase the case as 12 units or sell the items as 1/12 of a unit (i.e. 1 piece from a case of 12). This is very important from a valuation standpoint since QuickBooks uses average cost. To eliminate any possible confusion, it is helpful to include the unit in the description (i.e. ABC Jars (12 per case)) and to modify the form templates to designate the unit for the quantity as well (i.e. each).