QuickBooks Reports Help You Maintain Balanced Inventory Levels

Running out of products too frequently? Having to sell cheap because inventory is overloaded? Use QuickBooks’ reports.

It seems so simple in theory. Don’t overstock goods because you’ll tie up too much money and perhaps need a clearance sale to get rid of the excess. On the other hand, don’t let yourself run out of anything and lose orders.

In practice – especially if you stocks dozens or hundreds of items – it’s impossible to ensure this if you’re managing your inventory manually. Guesswork can be costly.

It’s a complex element of accounting, but QuickBooks comes equipped with a handful of reports that can keep you on track. They don’t teach you how to balance your inventory to improve profitability, but we can help with that.

Figure 1: Be sure to enter a figure in the Reorder Point field so QuickBooks can remind you to reorder.

Building Precise Records

There’s a critical number in your item records that must be completed: Reorder Point. You’ll see it at the bottom of the Edit Item window (click Lists | Item Lists and double-click on the correct entry or click New in the Item drop-down list). Without it, QuickBooks can’t alert you when you’re running low.

QuickBooks also tells you how many items are currently on hand. If you had reached the reorder point and created a purchase order, you’d see a number under On P.O.

Ideally, you would do this when you’re first adding item records, but you can go back at any time and add it.

Rigorous Reporting

Running reports regularly will keep you apprised of your inventory status. To see what QuickBooks offers, click Reports | Inventory or go to the Report Center. Select Inventory Valuation Summary. You can also see this report in detail, but if you carry a lot of inventory, it’s difficult to get a birds’ eye view. Do run it, though, if you want to see the transactions that affected your inventory’s value.

Figure 2: The Inventory Valuation Summary does just what the name says

In addition to what’s pictured here, this report displays columns for Sales Price, Retail Value and % of Total Retail. As always, you can click Customize Report to change the date range.

Figure 3: This report provides a real-time update of the status of every inventory item.

Precise Tracking

The Inventory Stock Status by Item report should be consulted frequently. It tells you exactly where all of your items are in the pipeline.

Watch for checkmarks in the Order column; they appear when you’ve hit or exceeded your specified reorder point. Three other important figures populate columns in this report: the number on purchase order, the date the next shipment should arrive and average sales per week.

Reminders can come in quite handy here. To set them up, go to Edit | Preferences | Reminders | Company Preferences. And you’ll find the most comprehensive view of your items in the Inventory Center. Go to Vendors | Inventory Activities | Inventory Center. This screen also provides quick access to commonly-used reports.

Figure 4: The Inventory Center tells you everything you want to know about your items.

Automate Your Inventory Reporting

Here’s a quicker way to grab your reports:

  • Go to Reports | Memorized Reports | Memorized Report List.
  • Click the down arrow next to Memorized Report at the bottom and select New Group. Type in Inventory and click OK.
  • Open an inventory report and click Memorize. The Memorize Report window opens. Check Save in Memorized Report Group and select Inventory from the drop-down list. Click OK. Repeat for others you want in this cluster.
  • Click Reports | Process Multiple Reports. Select Inventory from the drop-down list and make sure that there’s a check mark next to the reports you want. You can click on the dates in the From and To column to change them.
  • Click Display or Print.

If you operate a product-based business, the success of your company depends in large part on your ability to find the sweet spot: neither too much nor too little inventory. It’s an ongoing, daily challenge. Let us know if we can provide guidance on this critical balancing act.

 

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She currently sits is a board member at two local organizations. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor.
This entry was posted in Business, Operational Accounting, QuickBooks Tips and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s