Purchase Order & New Inventory Item 8.15

QuickBooks Online 2021 purchase order and new inventory item. In other words, we’re going to add a new inventory item as we create a purchase order. Let’s get into it with Intuit QuickBooks Online 2021. Here we are in our get great guitars practice file, we’re going to be entering a purchase order as we do so we’re going to add a new inventory item and add a new vendor.


To think about the scenario we’re going to go over to the QuickBooks desktop version just so we can see the flowchart and think through the flowchart. So you don’t need the desktop version. In order to follow along. It just has a nice flowchart that we’re going to be looking into. We’re talking about a purchase order up top the scenario that we are imagining, somebody comes into our store, a customer comes into our store, they ask for a guitar that is a Fender guitar made by Fender, the vendor would be fender and we’re going to say we don’t have that particular guitar.



We’ve never even dealt on purchased a guitar from Fender at this point in time. But possibly we can make them into a new vendor and order a guitar from Fender which would then be our new vendor that we would then then get from them and then we could sell it to you. So then that means that we’re going to see if we can request using a purchase order I a guitar from vendor that we from Fender that we’ve never done before, and see if we could set up a new vendor named Fender that and also set up a new item inventory item which will be that particular guitar as we make the purchase order.



Note that as we make the purchase order as we’ve seen in prior presentations, this is just a request form, we’re not going to be paying for the guitars at the point in time we make the purchase order, we’re not going to receive the guitars, there will be no financial transactions as we process this form, although we will still track it so that when we received the guitars either were imagined we’d received them in the future and possibly with a bill attached to them, then we’re going to be attaching the we’re going to record the guitars at that point in time increasing the inventory and then either entering a bill or paying for them at that point in time.



And then we’re going to turn around of course and sell those to the client that came in or the customer that came in requesting those guitars. Okay, so let’s do that we’re going to go back on over, we’re going to say plus button and go to the vendor section, we want a new purchase order, new purchase order. And we’re going to type in a new vendor and that’s going to be Fender so fenders, our new vendor, which is fun to say vendor, the new vendor, and then say tab. And we could add the details here. But we’re just going to do a quick add if it’s going to be a vendor, we thought we work with a lot, we might want to add more details to it.



But we’re just going to go with a quick add with the practice problem here. And then we’re we’ll keep this information the same, we’re going to say the date, let’s bring it up to the ninth, we’re going to say it happened on the ninth this one. And there we have that we got the shipping address and then so on and then it’s going to be an inventory item down below. Now we’ve never dealt with vendor this vendor.



So we don’t have any of their guitars, we’re going to have to set up a new item inventory item, knowing that we’re going to be tracking this information in our system using a perpetual inventory system. So I’m just going to call it an abbreviation of an Sq and say tab. And it’s going to say we don’t have that I’m paraphrasing QuickBooks with this pop up and saying hey, we don’t have that. That item.



Would you like to add it and we’re gonna say yes, it’s going to be an inventory item, because we’re going to be tracking the actual units of inventory as well. So we’ll set it up as an inventory item. So it’s an it’s an Sq, we’re going to call it no SKU no category, the amount on hand, we have zero at this point in time, I’m going to try to backdate this so that I’m going to just say at the end of the year to make sure that I don’t put a date before the point in time that we’re interested.



So I’m going to say January 1, reorder point, we’re going to say zero when it’s zero, we want to reorder the inventory, that’s going to be the asset account that’s going to be affected when we buy them. It’s going to be called a Squire. So that’s going to be the guitar name, Squire. And then the price that we sell these things for we sell them for $244. And the sale this is what we sell them for not what we’re purchasing them for. So they’re that 244 will not be used to populate the purchase order but will be used to populate the invoice it’s going to go to that income account.



Are they taxable? These are taxable, we’re gonna say because they’re inventory items that will have no impact on the purchase order we’re making here, but will when we make related sales receipts and invoices. And then I’m going to say the Squire is the description down here for the purchasing description as well. The cost is going to be for 168 It costs 168 cost of goods sold is going to be the expense account when we sell them that will not be impacted when we make the purchase order of course, but when we have the invoice or sales receipt, it will Let’s save it.



Let’s close it. Let’s check it out. So save close we got the Sq Squier and how many we’re going to purchase. We’re gonna say we want 20 of them. The rate is the cost rate that was applied. So there’s the 168 that’s a total of the 336 zeros. So there we have it, what’s this gonna do to the finance or there’s one more thing, we’re going to add the customer, the customer that came in, and this is going to be a new customer that we’re going to add as well they came in and ordered these squares for us.



So it’s going to be new music stuff, again, very generic customer name, but that’s the customer that came in and requested this, I’m going to add it, I’m gonna do a quick add here. So that’s the customer now remember the customer doesn’t matter with regards to the vendor, the vendor doesn’t care who the customer is. But we want to note on our end, when we pay for these guitars that we bought them for a particular customer so that we can then turn around and create an invoice and go straight to the sales side of things.



If it wasn’t requested by a particular customer, then we would leave this cell blank, and we would just be buying, say the 20 guitars to just put in our shop and sell them as we can. So we’re gonna record this what’s gonna happen to the financial statements when we record this? Nothing, nothing’s gonna, even though they’ve got numbers down here, you would think there’d be an impact, like on the balance sheet or income statement. But no, because this is just a request.



And it’s going to be used in to populate a bill or a check or an expense type form, when we actually get the the inventory. And that’s when we’ll record the investment. And that’s when we will record the inventory, I should say inventory, and the the other side of it and accounts payable or cash. Let’s save it and close it. What we can do is track it Now down here, I can track it. And we can track it going down to the purchasing or expenses area, which is like the the vendors, the vendor center, and then I could go down to Fender, our new vendor, that’s the new vendor, we set up vendor.



And there it is, there’s the purchase order, so we can have that. And there’s the we could send it or we can copy it to a bill. Once we have it, we can copy it to a bill and I could go back then I’m gonna go back to the vendor center and go to the expenses. If I go to the expenses tab, I can also find the purchase order here possibly look for the open purchase order with the filtering option looking for the transactions that are purchase orders because we’re trying to see if we’ve received these guitars yet.



So I’m going to say Did we receive them, I want the open purchase orders, pour five or and then apply that. And there it is. So there’s our open purchase orders there which once again, we can use to copy to a bill once received the bill then recording the increase in the inventory and the accounts payable if it were a bill that we entered. So no effect on the income statement or anything so I’m not going to print out a trial balance or anything because nothing nothing new happened to it.

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