How to Use QuickBooks Enterprise to Track Inventory

Running an inventory-based business can be challenging. Not only do you have all the typical responsibilities of running a business, such as payroll, customer service, and budgeting, but you also need to manage and account for inventory.

Fortunately, QuickBooks Enterprise can help. Your QuickBooks Enterprise software comes with smart inventory management features that make it simple to track and create reports on the inventory in your business.

However, adding Advanced Inventory to your QuickBooks Enterprise package can provide a range of additional inventory management features.

What is Advanced Inventory?

Advanced Inventory is a tool available in QuickBooks Enterprise that enables users to manage inventory from start to finish from a central dashboard. The company can track the movement and storage of products and materials within a warehouse and across multiple locations, making it easy to locate items quickly.

Items can be tracked by bin location, serial number, or lot numbers, and you can even automate inventory management with a wireless barcode scanning device.

If you’re already using QuickBooks Enterprise, adding Advanced Inventory will allow you to use:

• First In, First Out (FIFO) costing instead of the average costing method that is standard in QuickBooks for the cost of goods sold and inventory valuation purposes.
• Multiple location inventory. This is useful whether you have multiple locations within one physical facility or multiple physical locations.
• Bar code scanning. With a supported scanner device or an Android phone, an internet connection, and the Warehouse Manager app, you can improve efficiency by scanning inventory items.
• Bin or lot tracking. Bin or lot tracking allows you to identify the exact location of inventory within the warehouse.
• Serial or lot numbers. You can track by lot or serial numbers, but not both.
• Sales order fulfillment processes. Make it easier to find, prioritize, and check on the current status of sales orders.

Advanced Inventory is included in QuickBooks Enterprise at the Platinum and Diamond package levels. If you’re currently on the Gold subscription plan, you’ll have to upgrade to take advantage of the unique Advanced Inventory features. It’s also not available in QuickBooks Online or the desktop versions of QuickBooks Pro or Premier.

How to Turn On Advanced Inventory

It’s easy to turn on Advanced Inventory. First, if you’re in multi-user mode, you’ll need to make sure you’re in single-user mode. Then:

1. Click on the Edit menu, then select Preferences.
2. From the list on the left side of the screen, select ‘Items & Inventory,’ then click on the Company Preferences tab.
3. Be sure to check the ‘Inventory and purchase orders are active’ button.

If you’ve purchased Advanced Inventory, but the Advanced Inventory Settings button is grayed out, you may need to sync your license data online so that QuickBooks Enterprise recognizes it.

Once you activate Advanced Inventory, you can click on the Advanced Inventory Settings button to set up your Advanced Inventory.

This gives you access to settings for multiple inventory sites, serial or lot numbers, FIFO, barcodes, sales order fulfillment worksheets, and purchase order management worksheets.

Now, let’s look at each of these settings in more detail.

Multiple Inventory Locations

From the Multiple Inventory Locations tab, you can click on the ‘Multiple Inventory Sites is enabled’ button. The software will walk you through a wizard to add information about each of your inventory locations.

You can also check boxes to be warned about duplicate inventory transfer numbers, or transactions that would cause inventory to go negative.

If you click the ‘Track Bin Locations within Inventory Sites’ button, a wizard will walk you through the process of adding bin locations.

Serial/Lot Numbers

On the Serial/Lot Number tab, click the ‘Enable Lot or Serial Numbers’ button to enable the feature. Then you can select to track inventory items by either serial or lot numbers, but not both.

Directly below that, you have the option to show serial numbers on different forms within QuickBooks, including:

• Sales transactions (invoices, sales receipts)
• Purchase transactions (bills, receive items, credit cards, checks)
• Inventory Adjustments (and transfers)
• Build assembly

Then you can set some defaults to be warned if a serial number is blank, duplicated, or does not exist in inventory.

FIFO

On the FIFO tab, click the button to start using the First In, First Out inventory valuation method. You’ll also need to select the date on which your company started using FIFO. You may want to check with your CPA before making any selections relating to FIFO costing as it has an impact on your business’s financial reporting.

Keep in mind, if you want to use LIFO, this inventory accounting method isn’t available in QuickBooks Enterprise, even with Advanced Inventory. You may want to consider a different QuickBooks Enterprise add-on.

Barcodes

On the barcodes tab, click the button to enable the use of barcodes in QuickBooks Enterprise. Once you check that box, you can click the box below to open the Barcode Wizard. The software will walk you through the process of setting up your existing inventory items by copying over barcodes from the Item Name Field, Manufacturer’s Part Number, Purchase Information, etc.

This wizard will help you establish barcodes quickly and easily in QuickBooks Enterprise.

The latest version QuickBooks Enterprise 2020 also includes Express Pick-Pack, an optional workflow that combines the inventory picking and packing process to streamline your sales order fulfillment workflow.

Site Operations

The Site Operations tab includes several options:

1. Enable the Sales Order Fulfillment Worksheet. This worksheet allows you to check on the status of sales orders and see which orders are outstanding. You can generate picklists to be printed or sent to a mobile device.
2. Enable the Purchase Order Management Worksheet. This worksheet allows you to see which inventory items have been received and view notes for purchase orders after the receiving agent transmits the information back to QBE.
3. Add a device. If you want to use the Warehouse Manager app on a supported mobile scanner device or Android phone, you have to add the device here as well. The Warehouse Manager app integrates with QBE Advanced Inventory to efficiently receive items from purchase orders, pick and pack items collected from a warehouse and complete sales orders.

You’ll also need to set up each warehouse worker assigned to fill orders as a Picker in QBE to assign the employee to fulfill sales orders. This is done by setting up the worker as either a Vendor or Employee within QBE. The names of all pickers added in QuickBooks will appear on the scanner.

New Inventory Reports

Once you’ve set up the Advanced Inventory features within QuickBooks Enterprise, you’ll have access to several new inventory reports in the Reports Center. In addition to tools to help you manage inventory, Advanced Inventory adds a handful of new reports that you can create within the familiar QuickBooks reporting interface, including:

• Quantity on Hand by Site
• Stock Status by Site
• Valuation by Site
• Site Listing

Cycle Count

If you’ve been tracking inventory using a different method or system prior to turning on Advanced Inventory, you’ll want to verify that your current inventory numbers are accurate before importing them into QuickBooks Enterprise. Then, you can import them from a spreadsheet in the Item List area of QBE.

Once your inventory data is in QuickBooks Enterprise, future inventory counts don’t have to shut down operations. That’s because QuickBooks Enterprise includes a Cycle Count feature. This functionality allows you to keep track of the stock you have on hand and identify and address discrepancies between expected and actual inventory without the disruption of a total inventory count.

To create a Cycle Count, select Cycle Count from the Inventory menu. Click the blue ‘Create new cycle count’ button on the right, then select ‘Find and select items’ to identify the items you want to include in your cycle count.

From there, if you’re using a mobile inventory device, you can select ‘Send to device,’ and your warehouse workers can locate the item and bin and scan the necessary items. Once all items have been counted, the warehouse worker just needs to select ‘Send to QuickBooks,’ and the physical counts will appear on your QuickBooks dashboard.

If necessary, you can have QuickBooks automatically adjust your inventory in QuickBooks for the actual numbers on hand.

Set Reorder Points

Advanced Inventory also allows you to set site-specific reorder points for different inventory items. This way, QBE will warn you when you’re running low on certain items at a specific site so you can order more inventory before it runs out.

To establish a reorder point, select ‘Inventory Site List’ from the Lists menu (Make sure you’ve enabled Multiple Inventory Sites in your Advanced Inventory settings first). Then, from the Activities drop-down menu, select ‘Set Reorder Points.’

From there, you can select the site and enter the reorder point for each inventory item.

Final Word

With QuickBooks Enterprise and Advanced Inventory, you can easily keep tabs on all aspects of your inventory within your QuickBooks Enterprise company file.

If you’re wondering whether QuickBooks Enterprise with Advanced Inventory is the right fit for your product-based business or looking to host QBES in the cloud, reach out to one of our Solutions Consultants at 855-375-4955 for a free consultation.