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Quickbooks online plus offers what inventory costing method that desktop editions do not.QuickBooks Online vs. Desktop: Which Is Right for Your Business?
Each add-on offers its own set of features, such as bar-code reader integration, links to your company's e-commerce website for real-time inventory updates, forecasting modules and purchasing management. Certain add-ons may be industry-specific, such as AIMS for garment manufacturers. Average cost is the only inventory valuation method included with Quickbooks out of the box. It is the most simplistic way of accounting for inventory.
The total cost of a particular item is divided by the number of items currently held in your inventory. QuickBooks recalculates the average cost of the entire inventory when you enter a new purchase. Using average cost requires less record keeping than other inventory costing methods because the purchase dates don't matter.
It's also less accurate, especially if the your material costs fluctuate widely between purchases. You must install an add-on to use the first-in-first-out or last-in-first-out inventory costing methods. Both are more accurate than average cost method because the value of your inventory is based on the price at the time of purchase.
With the FIFO method, the first items placed in your inventory will also be the first items sold. Under the LIFO method, the last inventory items purchased will be the first sold.
LIFO is best if inventory prices have risen since the first item was purchased. It reduces the tax impact of holding inventory by applying largest cost against the most recent sales. FIFO is best when costs are on the decline and your oldest inventory was the most expensive. This method is also the closest match to the natural flow of physical inventory through your warehouse.
Individually allocating costs to single items is the most accurate method of tracking inventory, but is also time consuming if you have a lot of transactions to enter. This method is best for companies that deal in small numbers of inventory items or sell unique products, such as custom-furniture makers or dealers in collectibles.
Unfortunately, that picture cannot be added to the sales transactions such as estimates, invoices or sales orders. And also use bar code scanning when creating an invoice or sales receipt. Unfortunately is not so useful for inventory cycle counts or adjustments. Serial Numbers: allows you to add a serial number to each inventory item, and only be able to sell an item based on a serial number.
Or Lot Number Tracking : which allows you to group inventory items by lot number to track things like manufactured date or expiration date, etc… Multiple Inventory Locations : You can have more than one warehouse where inventory is stored and the inventory will be properly tracked on each location.
Bin Location tracking: you can also track inventory within one location using bin numbers But, if you still want to work with QuickBooks Online and want some advanced Inventory features, look into either one of these two 3rd party apps that integrate beautifully with QuickBooks Online: SOS Inventory or Exact Online.
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