Posting vs Non-Posting Inventory Transactions
Which inventory item entries in QuickBooks Online are Posting? Why Purchase Orders and Estimates are special.
Why does this matter?
For best inventory bookkeeping practices. Timing is EVERYTHING! Inventory asset balance changes should align with physical inventory movements. If they don't, things can get very messy, very quickly.
What is the Difference between posting and non-posting inventory transactions?
Posting transactions affect QuickBooks inventory item quantity on hand, and have transaction journal/GL-impact. Posting Transactions affect financial statements.
| Posting Entry | ||||
|---|---|---|---|---|
| Bill | Increases Inventory Asset | Increases Payable | ||
| Expense, Check | Increases Inventory Asset | Decreases Cash | ||
| Invoice | Decreases Inventory Asset | Increases Receivable | Increases COGS | Increases Revenue |
| Sales Receipt | Decreases Inventory Asset | Increases Cash | Increases COGS | Increases Revenue |
Non-posting transactions do not change inventory, they simply record an "Intent to pay" (purchase order), or an "Intent to get paid" (Estimate). Non-posting transactions have no transaction journal/GL impact, they do not have any affect on financial statements
| Non-Posting Entry | ||
|---|---|---|
| Purchase Order | No Change to Inventory Asset | No Change to Payable or Cash |
| Estimate (Sales Order) | No Change to Inventory Asset | No Change to COGS, Revenue, Receivables, Cash |
Posting Inventory Entries in QuickBooks Online include:
- Bill
- Expense
- Check
- Sales Receipt
- Invoice
- Inventory Adjustment
Non Posting Transactions - Purchase Order
- Estimate (Sales Order)
Less common inventory posting transactions, Reversals
Reversals to Posting Sales
Refund Receipt
Delayed Credit
Delayed ChargeReversals to Posting Purchases
Vendor Credit
Credit Card Credit
Best practice for orders: Use Non-Posting Transactions
Enter orders you make to your suppliers as Purchase Orders
Enter orders your customers make to you as Estimates (Sales Orders)
Non-posting entries for orders are nearly always better bookkeeping. Use them for orders unless inventory physically changes at the same moment of ordering.
What about partial and full pre-payments related to Inventory Items?
This is common. Unfortunately the correct method to account for prepayments adds 2 steps. Partial and Full pre-payment workflows (see workflows B and C)
Updated 8 months ago