Lesson 8-4: Create A Subitem Inventory Part – You may want to create sub items for your inventory parts when there is more than one choice for an item. This will allow you to track sales and inventory accurately. Before you create a subitem, you must first create a parent item. After the parent item is created, then you can create the subitem. A parent item is created just like we did in lesson 8-3, but we will create on here also. To create a subitem, perform the steps in the video below:
Here is a summary of the steps that were performed in the video below:
1. Click the lists menu, then click Item List.
2. Click Item at the bottom left of the window, then click New.
3. Select Inventory Part from the Type drop-down menu.
4. In the name field, enter in a generic name. For example, Joe’s Landscaping sells red, pink and white roses. In the name field, I will enter Roses.
5. You can enter a manufacturer’s part number, but it is optional because the detailed information will be in the subitems.
6. You can enter in a description for purchases and sales, but it is also optional.
7. I do recommend that you enter in a cost and sales price in their respective fields because if you need to sell an item that is not in your subitem list, then the parent item will be the default item to include on the invoice.
8. You must enter in an account for Cost of Goods Sold and the Income Account.
9. You must also enter an account for Asset account.
10. Do not enter an amount for quantity on hand, reorder point or preferred vendor.
11. Click OK.
12. Now we will create the subitem. Click Item at the bottom left, then click New.
13. Select Inventory part from the drop-down list.
14. Enter a name for the subitem. In this example, since the parent item was roses, I will now enter color for the roses. You can also enter in an item number, size or any other name that fits your company’s inventory naming requirements.
15. Place a check in the box labeled Subitem Of then select the parent item from the drop down list that will appear as a result of checking the box.
16. You can enter in a sales and/or purchase description if you choose. If you enter in a sales description, it will appear on the invoice. If you enter in a purchase description, it will appear on the purchase order.
17. Enter in the cost for the item. This amount will be what your company will pay for the item from the manufacturer. Be advised that if your company’s manufacturer changes the price in the future, you will need to adjust the cost in this field accordingly.
18. Enter in a Sales Price for this item. This is the amount that your company will charge your customers. Be advise that if your company decides to change the sale price of this item, you will need to adjust the price in this field accordingly.
19. If there is a preferred vendor for this item, select it from the drop down list in the preferred vendor field.
20. You must choose an Income account for this item. This will be the account that will appear on your company’s income statement.
21. Choose an Asset account Inventory Asset for this account.
22. If you would like to be reminded to order more of this item when the inventory reaches a certain level, enter in a quantity in the reorder point field.
23. If you have any of these items on hand, enter the quantity in the On Hand field.
24. Click OK at the top right.