Section 1: Managing Products & Services List

What do clients need to be aware of when setting the sales tax rate?

For clients who use sales tax in QB Online, QB Online calculates the sales tax using the standard rate by default. With this setting, when clients add a new taxable product/service, sales tax is calculated based on the seller's (that is, the client's) location. Clients can change the sales tax rate to a custom rate or tell QB Online that the item is nontaxable, if applicable. Clients with QB Online Plus or Advanced can add additional information about products or services they purchase from vendors. Clients who choose this option need to fill in the following details about the item: - A description of the item that will appear on forms such as purchase orders The item cost - Which expense account in the chart of accounts will be debited when the item is added to an expense transaction - The client's preferred vendor, if they have one

How do you assign a product/service item to a category?

Once you've set up a product category, you can assign a product/service item to it when you're adding the item in QuickBooks Online. You can also assign an existing product/service item to a product category. To do this, select Edit from the Action column in the Products and services center. Either way, in the Product/Service information panel, select the appropriate category from the Category dropdown If you choose a sub-category here, it will appear in the Category name field as "Category name:Sub-category name." For example, "Vehicle inspections:Oil inspections."

Can you create a product category when you add a new product/service?

Yes, you or your client can also create a new product category when setting up a new product/service. You can only create a new product category when you add a new non-inventory, service, or inventory item—not a bundle. 1. Start by setting up a new product/service, as described in the lesson on the chart of accounts and the Products and services list 2. When you get to the Category field, open the dropdown and select Add new 3. Give the category a suitable name and select Save 4. Continue to add the remaining item details, then select Save and close The item will be listed under the new product category in the Products and services list.

Can you add sub-categories to a category?

You can only add a sub-category via the More > Manage categories > New categories method, not when setting up a new product/service item. To create a sub-category, select the Is a sub-category checkbox in the Category information panel. This will make a second dropdown appear, from which clients can assign the sub-category to an existing category. The sub-category appears in the categories list, you can only have up to four category layers, including the parent.

Inventory

(Available in QB Online Plus & Advanced only) These are items that are bought and sold, and whose quantities on hand are tracked. Your clients must subscribe to QuickBooks Online Plus or Advanced to use this feature.

Bundle

This is a collection of products and services that are sold together. For example, a package that includes an exterior door and a security lock, or a product installation that includes both labor and materials.

How do you create a Product Category?

1. Select More, followed by Manage categories 2. Then select New category 3. Give the category a suitable name and select Save The new category will now appear in the categories list.

Setting up products and services to sell and/or purchase

In the Product/Service information panel, clients have the option to tell QuickBooks Online whether they: - Sell this product/service to their customers - Purchase this product/service from a vendor (available in QuickBooks Online Plus and Advanced only) Clients who select this option need to fill in the following details about the item: - A description of the item that will appear on sales forms such as invoices - The sales price/rate for the item - Which account in the chart of accounts will be credited when the client generates an invoice for this item - The sales tax rate for the item

Creating and using product categories

Product categories in QuickBooks Online allow your clients to group items of the same type. For instance, if your client has a retail business selling hiking gear, they may want to create product categories for items such as hiking boots, backpacks, and tents. Categories help you and your client easily find products or services. They are also very useful when running sales and inventory reports, as they make it easy to compare and explore data by product category.

Products and services settings

QuickBooks Online allows you or your clients to customize certain product and service features, such as whether to include product/service information on sales forms (invoices, estimates, and sales receipts) and whether to turn on inventory tracking. To customize the fields and columns on sales forms, select the Gear icon and then Account and Settings. Select Sales from the left menu and scroll to the Products and services section.

Product & Services Center

The products and services list can be found in the Products and services center in QuickBooks Online. To open the Products and services center, select Sales from the left-hand navigation, then Products and services.

Non-inventory

These are items that are bought and sold, and whose quantities on hand are not tracked. Your clients may use this item type for small parts used in the installation or delivery of a product.

Service

These are services that are provided to your client's customers. They can be one-time, recurring, or fixed-fee services.