You’ve already heard of QuickBooks — one of the most popular accounting software solutions for small to mid-sized businesses. With a range of features like automated invoicing, expense tracking, payroll processing, and financial reporting, this user-friendly Intuit product has helped countless business owners streamline their accounting processes.
What you might not know is that QuickBooks also facilitates basic inventory management. And companies with more complex needs can save thousands of dollars by integrating QuickBooks with their inventory management system.
From tracking stock levels to managing orders seamlessly, here’s how to leverage QuickBooks inventory management to enhance efficiency, minimize errors, and drive business growth.
How QuickBooks approaches inventory management
QuickBooks Desktop 2021 has been discontinued. But you can still use newer versions of QuickBooks Desktop, as well as QuickBooks Online and QuickBooks Enterprise, for their impressive inventory management capabilities. Here’s a quick look at what these powerful accounting solutions can do:
- Inventory tracking: The system automatically updates stock levels as you make sales and receive new inventory. Monitor inventory quantities and costs in real time.
- Inventory costing methods: If you already use first-in, first-out (FIFO), you don’t have to change your current systems to accommodate QuickBooks.
- Streamlined purchasing: QuickBooks makes it easy to create purchase orders, track incoming stock or merchandise, and manage vendor relationships.
- Sales and invoicing: When you make a sale, QuickBooks automatically updates inventory levels and generates invoices to reduce manual data entry. This avoids human error and helps fulfill orders faster.
- Reporting and analytics: Generate reports on inventory valuation, stock levels, sales performance, and profitability by product — all of which lead to more informed decisions.
You might wonder what QuickBooks can’t do to help with inventory management. While it is a helpful tool, QuickBooks’ features mainly focus on tracking inventory levels and costs. You won’t receive advanced warehouse management features like barcode scanning, lot tracking, or advanced picking and packing functionalities.
But QuickBooks offers integration with several third-party apps and software that extend its capabilities, including Fishbowl. Fishbowl fills in QuickBooks’ gaps, so when used together, they have all the tools necessary for smooth inventory management.
6 benefits of using QuickBooks for inventory management
If you’re using QuickBooks as a standalone inventory management solution, here’s a deeper look at the perks.
1. Streamlined tracking
One of QuickBooks’ primary benefits is the ability to maintain an accurate inventory count. The system automatically updates inventory levels when you record sales, returns, and new shipments. For example, if a customer returns a product, QuickBooks automatically adds the item back into your inventory. This type of real-time tracking shows how much stock is on hand, reducing the risk of stockouts or overstocks.
2. Order management
QuickBooks simplifies order management by creating and tracking purchase orders. You can also set reorder points to get stock alerts when it’s time to replenish inventory, making it easier to manage levels efficiently and avoid running out of popular items.
3. Financial insights
With QuickBooks, you can analyze inventory costs, profitability, and sales trends — data that helps you make decisions about what items to keep in stock and when. These valuable financial insights come from detailed QuickBooks reports like the Inventory Valuation Summary, Sales by Item Summary, and Inventory Stock Status by Item, which all provide a helpful overview of your inventory’s financial impact.
4. Integration capabilities
Integrating QuickBooks with an inventory management system like Fishbowl allows for seamless data synchronization. These tools work together to ensure that all accounting and inventory data are current and accurate, eliminating the need for manual data entry and reducing the likelihood of errors.
5. Automation
QuickBooks automates routine tasks like updating inventory levels and recording expenses. For example, when you record a sale, QuickBooks automatically generates an invoice, updates accounts receivable, and deducts the sold items from inventory. This saves time, reduces mistakes, and lets you and your team focus on more strategic tasks.
6. Scalability
As your business grows, QuickBooks scales with it. QuickBooks Enterprise offers advanced features for larger businesses, including advanced inventory tracking, enhanced reporting capabilities, and the ability to manage multiple locations. And it’s easy to switch between products to access the features you need without changing platforms or learning a new interface.
How to use QuickBooks for inventory management
Here’s a step-by-step guide to start using QuickBooks to manage inventory.
1. Set up inventory items
Add inventory items in QuickBooks. Include details like the item name, description, and sales price. The system uses this information to track inventory levels and generate reports.
2. Create purchase orders
When you need to restock, create purchase orders, which explain what items you need and when. This helps QuickBooks update the records when new goods come in.
3. Record sales and ensure accurate inventory
Record sales, returns, and damaged goods to maintain an accurate inventory count in QuickBooks.
4. Set reorder points
When you run out of the products customers want to buy, you risk losing sales. Avoid this type of costly stockout by setting reorder points. QuickBooks notifies you when it’s time to restock, ensuring optimal inventory levels.
5. Generate reports
QuickBooks’ reporting features make it easy to analyze inventory data. Use the information to improve your processes, whether that’s speeding up fulfillment or trying a new counting method.
QuickBooks integrations for advanced inventory management
If your business is just getting off the ground, QuickBooks may be all you need for basic inventory management. But as your needs become more complex, you’ll benefit from a more advanced solution — like Fishbowl’s warehouse and inventory management software.
Fishbowl is designed to be QuickBooks’ perfect partner. Together, they allow for more costing methods, variable pricing, and part tracking, just to name a few of their powerful tools.
Here’s what else to expect from this inventory-specific software:
- Barcode scanning: Barcode scanning automates data entry and improves accuracy. Assigning barcodes to every SKU means stronger inventory tracking, even across different locations.
- Lot tracking: QuickBooks and Fishbowl let you analyze stock by lot numbers for quality control and traceability.
- Multiple warehouse management: Accurately manage inventory across multiple locations with ease. You always know which warehouse has what so customers are never left without the items they ordered.
- Manufacturing: QuickBooks and Fishbowl go beyond tracking stock. You can also manage raw materials, works in progress (WIP), and finished goods.
- Advanced reporting: Receive in-depth insights into inventory trends and performance to help you make decisions that drive growth.
Fishbowl: The inventory software solution that integrates seamlessly with QuickBooks
Whether you’re new to inventory management or looking to improve current processes, integrating QuickBooks with a dedicated inventory system offers the tools and insights you need to succeed. And it’s easy to do with Fishbowl — the all-in-one inventory management solution designed to help control stock, warehouse operations, and manufacturing workflows.
If you’re ready to take control of your stock and gain end-to-end visibility over your operations, schedule a demo today.