Inventory Items Which You Never Stock
“I want my special order Items that are drop shipped to post directly to my Cost of Sales account, but I don’t want to Inventory this Item.”
In some instances, Items which would normally be inventoried (e.g. physical goods of value) may not need to be tracked as inventory. Check with your C.P.A.
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Items that you specify as Inventoried, by checking the Inventory checkbox on the Item tab of an Item Card, need to have an Asset Category and Cost of Goods Sold Category specified in the History tab of the Item Card. Items that are not Inventoried and do not have the Inventory checkbox checked, require only an expense account.
In the case of Items that you sell and then order for drop shipment directly to your customer, you may never actually stock the Item. You may find it easier to track these as non-inventoried Items which post directly to a Cost of Sales Account. Check with your C.P.A. to confirm that this method is acceptable. You may want to simply create one non-inventoried Item, which is Bought and Sold, as your Special Order Item. Check the Bought and Sold checkboxes, and on the History tab in the Expense Category select a Cost of Sales Category.
Keep in mind that by turning off Inventoried on an Item, you are turning off the ability to track Item Quantities. For Items that have a Quantity on Hand or a Total Cost, you cannot turn off Inventoried unless you zero these quantities using an Item Adjustment (or by selling your remaining stock).
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