Summary
ServiceBox is introducing a new feature that enhances accounting accuracy by allowing users to assign expense accounts when creating vendor orders. This feature is particularly valuable for syncing with QuickBooks Desktop and ensuring that both inventory and non-inventory items are correctly categorized for financial reporting.
Key Highlights of the New Feature
Assign Expense Accounts to New Items
You can now specify expense accounts when adding items via vendor orders. These accounts are automatically synced with your accounting software, minimizing manual data entry and errors.
QuickBooks Desktop Users:
Go to the Purchase Expense Accounts tab in your connector settings to configure these accounts.
Handling Inventory and Non-Inventory Items:
One key aspect of this new feature is how it handles both inventory and non-inventory items, ensuring that they're correctly linked to the appropriate accounts.
Inventory Items
If inventory tracking is enabled in ServiceBox, new inventory items will not be assigned an expense account directly. Instead, they will be linked to a "Cost of Goods Sold (COGS)" account. This is because, in accounting, purchasing inventory involves debiting the inventory asset account and crediting cash, meaning no expense is recorded until the inventory is sold.
For inventory items
- ServiceBox will set up the new item with a COGS as its expense account.
- When you purchase inventory, your accounting software will debit the inventory asset account (increasing inventory) and credit cash (decreasing cash).
Why is there no "Expense Account" checkbox for Inventory?
Since inventory is considered an asset until it is sold, ServiceBox and QuickBooks handle inventory purchases differently than non-inventory items. For inventory items, you don’t immediately see an expense account because the expense is recorded later, during the sale (COGS).
Non-Inventory Items
For non-inventory items, it works differently. When you purchase a non-inventory item, an expense account needs to be debited at the time of purchase, which is why you will see an expense account checkbox for non-inventory items.
For non-inventory items
- ServiceBox allows you to link expense accounts directly when creating new non-inventory items in vendor orders.
- This ensures the appropriate expense account is debited when these items are purchased.
Category-Specific Expense Accounts
In addition to global expense account settings, ServiceBox also allows users to set expense accounts for specific item categories like Materials, Labor, or Other. This provides further flexibility to ensure that different types of expenses are correctly categorized according to your business needs.
If a category-based expense account is not specified, ServiceBox will default to the broader setting defined for all new items.
Customization Flexibility
This feature offers two layers of customization for users:
- High-Level Control: Assign expense accounts for all new items.
- Granular Control: Assign expense accounts based on individual categories (such as Materials, Labor, etc.).
By offering both options, ServiceBox ensures that businesses can tailor their accounting workflows to fit their specific requirements.
Need Help?
For assistance setting up expense accounts or using this new vendor order feature, contact our support team at support@jobboxsoft.com or use the Help button within your ServiceBox account.