Lesson 4-3: This free QuickBooks Pro 2013 tutorial will show you how to create a Service item. A service item is easier to create than an inventory item. In this example, we will create a service item for an assembly that will be done by a subcontractor. This means that there will be a cost to your company, and that cost will be increased and passed on to the customer. To create a service item, perform the following steps:
1. Click lists on the menu bar, then click Item List
2. Click Item at the bottom, then click New to create a new item.
3. In the Type field, choose Service.
4. We will enter information in highlighted fields, then we will choose “This service is used in assemblies or is performed by a contractor or partner.”
5. Click the box next to the label “This service is used in assemblies or is performed by a contractor or partner.”
6. In the Item Name/Number field, enter the name or number of the item. In this example, the name of the item will be called Assembly Fee. Assembling will be performed by a subcontractor, which means that they will charge your company a specific amount, and that cost will be passed on to the customer after we increase it to make a profit. The cost field is what the subcontractor is charging your company, and the Price field is the amount that your customer will pay to you. The expense account will be Cost of Goods sold. Most states do not charge sales taxes on labor, so in the Tax Code field, select Non-Taxable. When we sell the service item, we have label which type of income it is. We will select Maintenance Services for this example.
7. We are going to create an invoice for a customer, and that invoice will include the service item that we just created. Click Create Invoice on the QuickBooks home page.
8. Select a customer.
9. Select the service item that was just created.
10. You will see the item included in the invoice. The customer will pay your company $75, but the subcontractor will only charge us $50 which leaves us with a $25 profit for this sale.