Newbie Inventory/COGS quesiton


J

Jeff Champeau

Greetings.

Quick question from an obvious newbie. I recently started an IT
services and consulting firm. I often purchase and resell
custom-ordered computers for clients. Most of the time, I'll order a
certain number of a custom-built computers for a client, and then
never sell another computer exactly like it.

What's the best way to handle that? Create separate inventory items
so the COGS is correct? Create one generic item called "Computer" and
change cost, price, etc. each time? Use non-inventory parts?

Thanks!


Jeff
 
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T

Tee

Jeff Champeau said:
Greetings.

Quick question from an obvious newbie. I recently started an IT
services and consulting firm. I often purchase and resell
custom-ordered computers for clients. Most of the time, I'll order a
certain number of a custom-built computers for a client, and then
never sell another computer exactly like it.

What's the best way to handle that? Create separate inventory items
so the COGS is correct? Create one generic item called "Computer" and
change cost, price, etc. each time? Use non-inventory parts?

Thanks!
If you're immediately turning them over then they really don't become
inventory because you're not holding them in hopes of selling them at some
point. Therefore you're providing a service and should use non-inventory
part items.

So buying custom machines for immediate turnover to a client would use the
non-inventory part item "custom machine" with no concrete prices connected
to it, just the correct accounts selected. Then when you buy & sell them
the costs are whatever you paid via the vendor invoice and the sale price
whatever you charged the customer.

For things that you do stock (as in order and eventually use) like hard
drives, cables, modems, memory and even barebones boxes then you use
inventory parts for them. If you only buy from one vendor where your prices
will be fixed then you can record those prices in the item window. Not
doing so won't hurt anything. You'll just enter the cost when you buy the
item and the sale price when you sell it. I often find it easier to just
leave the purchase price at zero since vendors often change prices.
 
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M

Mike Block - QuickBooks Tax Cut C.P.A.

(e-mail address removed) (Jeff Champeau) wrote in message Greetings.

Quick question from an obvious newbie. I recently started an IT
services and consulting firm. I often purchase and resell
custom-ordered computers for clients. Most of the time, I'll order a
certain number of a custom-built computers for a client, and then
never sell another computer exactly like it.

What's the best way to handle that? Create separate inventory items
so the COGS is correct? Create one generic item called "Computer" and
change cost, price, etc. each time? Use non-inventory parts?

Thanks!


Jeff


If the name and the nature of your inventory remain the same then its
better to create one inventory and enter the different price. But if
the name and the nature of your inventory keeps on changing then its
better to create different inventories and make them inactive after
the sale is over as you won't be selling it again.


Mike Block - QuickBooks Tax Cut C.P.A.
Intuit paid me to make QuickBooks better!
http://www.blocktax.com/
http://www.quickbooks-add-ons.com/
 

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