Now that you have learned how to set up the chart of accounts (part 1 and part 2) in QBO, the next step is for you to learn how to set up products and services list in QuickBooks Online. The products and services list represents the list of products and/or services that you sell. You will use items from the products and services list when you create customer invoices, enter purchase orders, and work with inventory.
Setting up the products and services list is mandatory in QuickBooks Online.
Tip: set up the products and services list after you set up the chart of accounts in QBO.
How to find the products and services list in QBO
Click on the Gear Icon on the upper right and click on Products and Services.
The products and services window will open.
How to add a new service item to QBO
We’ll focus on how to add a service item in QBO. From the products and services window, click New on the upper right.
From the Select a Product Type – click on Service.
The Product or Service Information window will open.
Enter the name of the service, such as consulting services, repair, cleaning, etc. The name has to be a unique name.
Enter the description of the service in the “Description on sales forms” field. This will show up on an invoice but you can always change it.
Enter the Price/Rate if you want that price to show up on an invoice. If not, leave it blank. You can always change it on the invoice.
Income account – very important! Remember how I told you that you should set up and customize the chart of accounts first? This is because you want to make sure that you have set up all the income accounts that you will use. Make sure that you choose an “Income” account type. You can see the income type to the right of the account name. This is a common mistake that most people make – make sure you select the correct account.
Is taxable – click this field if your service is subject to sales tax. Otherwise, leave this field blank.
Click Save and Close.
How to edit a product and service item in QuickBooks Online
From the products and services list, find the item you want to edit and click Edit on the right side.
Edit the fields as needed.
You can change a service item to an inventory item if you need to.
You can also change the description, price/rate, income account, or whether the item is subject to sales tax.
Click Save and Close.
How to add a sub product/service in QuickBooks Online
You can organize your products and services item list in categories by using sub-items (sub products/services).
Let’s say for example, that we want to make Gardening a sub-item of Landscaping.
Edit the Gardening item by clicking Edit on the right side.
Click Is sub-product/service.
Select the “parent” item from the list of items – in this case Gardening.
Click Save and Close.
How make a copy of an item already entered
You can save a lot of time entering items if you use the “duplicate” feature.
From the products and services list, find the item you want to duplicate and click the down arrow on the right side.
Click Duplicate.
A window will open with an exact duplicate of the item selected. Make the necessary changes and click Save and Close.
How to delete a product and service item in QBO
From the products and services list, find the item you want to delete and click the down arrow on the right side.
Click Delete.
Deleting an item does not delete transactions you have previously entered using that item.
You can also make multiple items inactive at the same time. Jus use the handy Batch actions button.
How to change the columns in the products and services list
If you find that the products and services list is a bit too cluttered or if you don’t want to see certain columns, simply click on the Gear icon in the products and services window. Unclick the columns you don’t want to see.
Here’s a Slideshare tutorial for you that you can download:
That concludes our tutorial on how to set up the products and services list in QuickBooks Online. Next time, I will go over how to set up inventory items in the products and services list. Keep up with our tutorials and you’ll be amazed at how much you will learn about QuickBooks Online. Until next time!