The Inventory features have been designed primarily to meet the needs of small businesses that purchase items for inventory and resell them. Inventory functions automatically create the journal entries for all incoming and outgoing inventory items.
The steps and suggestions in the following process help you to take full advantage of the Inventory features:
1. Subscribe the client to the Client Accounting Services module.
2. Define the company as using inventory on the Preferences tab of the Company Setup screen.
3. Define inventory method, indicating the inventory method (FIFO or LIFO) to use on the Inventory Preferences screen.
4. Create a current asset account for Balance Sheet Inventory and your cost of goods sold accounts for Beginning and Ending Inventory on the Account List tab of the Accounts screen, and assign these accounts to the appropriate category codes.
5. Set up products as inventory items, either directly, using the Set Up Inventory Products screen, or by defining products as inventory items when you set them up on the Set Up Products screen in the Sales module.
6. Purchase inventory items, and, if you are using the perpetual method, enter quantities and costs for inventory items purchased on the Expenses menu Enter Bills screen. Journal entries for quantities on hand and purchase costs are automatically updated.
7. Sell inventory items, and, as you enter invoices for inventory items sold on the Customer Invoice screen of the Sales menu, inventory is reduced according to the method you selected, and quantities on hand are automatically adjusted.
8. Enter inventory adjustments and updates on the Inventory Adjustment screen. If you use the periodic method, enter increases and decreases to inventory, and update inventory quantities.
9. Review the reports available on the Inventory Reports screen, including the Inventory Summary, Cost of Goods Sold, Profitability, and Transactions reports.