hey it's patti scharf CPA and co-founder of catching clouds the leader in
e-commerce accounting today I'm going to help answer the question does quickbooks
online help keep track of inventory so the answer this question is yes with an
unsatisfactory follow-up answer for e-commerce sellers which is not really
well so let me jump in and show you why I say yes all right so I'm gonna give
you a quick mini tour around one little section in QuickBooks Online so you log
in if you go to sales you'll see this thing called products and services
products and services is actually where the inventory is kept okay and you'll
see like I have this set up this widget down here it's called non inventory for
the type if you go to edit you can actually change the type to be inventory
if you turn on inventory tracking you're gonna pay for I think the highest level
version of QuickBooks Online just so you know but what's going on here is the
widget I have set up is non inventory that means that it's not keeping track
of products that you buy when you buy products typically you buy them they go
into inventory and then you sell them it gets marked off as cost of goods sold
okay so you you should not in theory typically being expensing your the
products that you buy until it gets to the point that you're actually selling
them okay I don't want to get too deep into that I just want to kind of show
you what's going on so so what happens is in QuickBooks Online you have the
ability to set up one SKU so in this case with 0 0 1 and I can assign a
description to it and then I can assign like when that's included on an invoice
it'll automatically go to sales the money will go to sales when the product
is sold and at the same time it will be marked off as cost of goods sold when it
is sold ok so you'll have the income and the expense which means you'll be able
to run reports that show profit led by skew when every year selling
these products okay you you sell it and it seems amazing you're like oh I sell a
hundred widgets and it's gonna be you know a hundred times a hundred dollars
and then the the cost is going to be twenty five hundred dollars and it's
going to like have these pretty reports but the problem is with e-commerce
e-commerce has a few funky things first of all if you're selling on more than
one channel so let's say you're selling on eBay and you're selling on Shopify
and you're selling on Amazon well you've got this one SKU and it's being sold all
these different places let's say you buy 10,000 units you might be selling 10,000
units here a hundred units here and 2,000 units there you could run out of
stock and you wouldn't know it because you don't have one unified system that's
tying back to the same thing they may all use different SKUs you may have to
keep track of the different SKUs because they have different listing SKUs and I
mean it gets really complicated right the other problem is when you something
has returned to you you might not be capturing that information and adding
those units back into stock so so the numbers are kind of funky and and the
biggest problem is I've seen a lot of companies who go from selling pretty
much nothing to selling like $100,000 in a matter of six months or they go from
just a hundred SKUs to like a hundred thousand SKUs in a short period of time
and this system was not built to keep track of that it is then the needs of
e-commerce sellers is too robust for quickbooks online i know that a lot of
people will try going to quickbooks enterprise because they've got a lot
it's just a bigger database it can hold more information so and it has like
different rules as far as inventory valuations and things like that so
people will try that but quickbooks enterprise
a desktop solution it doesn't integrate as well with all these the cloud
shopping carts and things that are out there it's just it's it's too much
people are trying to turn QuickBooks Online or zero for that matter zero is
in exactly the same boat they're just simplistic solutions for
complex problems and it's really not the best solution so if you are an online
seller and you want to keep track of your inventory you have some other
options I've got like a whole video on that you might want to go check this out
but you want to start thinking about a cloud inventory solution quickbooks
online typically not the way to go all right one other thing before I go
scott and i are going to be speaking at scaling new heights it's an accounting
conference in utah in June I think it's we're speaking June 16th which is a
Sunday in Salt Lake City and so scaling new heights come check us out we'll be
there for like I think an hour and a half or something giving you all the
best practices for e-commerce businesses so come say hi and and then if you're
going to xerocon we're going there right afterwards so well we won't be speaking
but we'll be waving hello so come up and say hi to me there too and I guess
that's it I hope you like this video if you did please like comment and share if
you haven't already please subscribe and I'll catch you later