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
BillIncreases Inventory AssetIncreases Payable
Expense, CheckIncreases Inventory AssetDecreases Cash
InvoiceDecreases Inventory AssetIncreases ReceivableIncreases COGSIncreases Revenue
Sales ReceiptDecreases Inventory AssetIncreases CashIncreases COGSIncreases 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 OrderNo Change to Inventory AssetNo Change to Payable or Cash
Estimate (Sales Order)No Change to Inventory AssetNo 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 Charge

Reversals 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)