Ever tried going upstream, against the flow of the current? You have to work much harder to make progress. Going WITH the flow is much easier. Intuit’s Point of Sale (POS) has a flow to it and when you follow the flow, everything falls into place where it should and you get reliable numbers.
I have worked with a few retail clients recently who setup Intuit’s POS on their own, but did not understand the proper work flow. One client was good about leaving Average Cost blank, but did not receive items into inventory, so the item showed zero (0) cost, 100% profit. Definitely incorrect! Several clients manually adjusted inventory quantities in the items list. When that happens, an adjustment comes over into QuickBooks as a Document or POS Adjustment; that account will need to be analyzed to see if those numbers really need to be elsewhere; many times they do. Some clients have sold inventory and later entered the Receiving Voucher. Unfortunately, POS does not take that Receiving Voucher into consideration in the sale already made, so your cost of goods is incorrect. As you can imagine, cleaning up is not fun as these clients are discovering.
Here’s the typical flow for POS:
- Create Department & Vendor
- Create/define Items – leave Quantity and Average Cost (this is a calculated field) empty
- Create a Purchase Order for the Vendor; this is not a required step, but I like it for these reasons:
- You can do the Purchase Order at your “leisure” whereas Receivings should be done quickly.
- If you can’t enter the entire order at one time, you can edit the Purchase Order later to add more items.
- When the items come in the store, you can receive them into inventory much faster. After all, the idea is to get the items on the floor ASAP so you can sell them!
- It gives you a form you can email or fax to a Vendor.
- It gives you a way to compare what you thought it would cost to what the Vendor actually charged you.
- Lets you know what Inventory Items are expected and when.
- Helps you track what’s on backorder.
- Gives you a chance to cancel the order if the shipment comes after a designated date.
- When inventory comes in , use the Receiving Voucher (if you don’t use a Purchase Order, this is then step 3.
- If you used a Purchase Order, you can enter how many actually come in vs. how many you ordered; if everything came in, this is a fast process. Otherwise, type or scan what came in and how many.
- You can enter cost of products, in case it’s different than you expected.
- You can also add freight and other fees or taxes; the Receiving Voucher has boxes for that information. You can have those costs spread across your inventory so that your actual item shows both order cost plus any freight and other fees.
- The Receiving Voucher is how POS updates quantity and average cost in your system.
- You can print tags for your inventory from your Receiving Voucher.
- You can put a hold on a Receiving Voucher (just like you can put a hold on a Sales Receipt), if you get interrupted, which happens frequently in retail.
- You can set the company preference for Receiving Voucher to let staff enter the bill information in the voucher if you want. It then comes over as a bill in QuickBooks in Accounts Payable. Otherwise, it goes to QuickBooks as an Item Receipt and you enter the bill in QuickBooks.
When done correctly, numbers go in their proper places and you have reliable Purchase Orders helping you make good business decisions. Now you are ready. Get set and sell your items!