UPDATED 05/03/2021

QuickBooks Enterprise Platinum/Diamond is a really great accounting and inventory management package, specially for Manufacturers, Wholesalers, and E-commerce type businesses.  And it has a lot of great features, it does fall short  in many areas where people just expect for it to work. My course on QuickBooks Desktop Inventory Management covers a lot of those things:

So here is a list of what it can and cannot do, based on our experience and customer requests!

What QuickBooks Enterprise can do with Inventory (as of version 2021, US version):

  • Track Inventory Parts and Inventory Assemblies (Bill of Materials)
  • Build sub-assemblies (Inventory Assemblies within other Inventory Assemblies)
  • Track Multiple Units of measure
  • Track Backorders with Sales Orders
  • Track Item Receipts separately to Bills with Enhanced Inventory ReceivingBUT WE RARELY RECOMMEND THIS FEATURE FOR A NUMBER OF ISSUES
  • Prevent users from selling inventory not in stock (Negative Inventory)
  • Track Minimum and Maximum desired inventory levels
  • Track up to 12 custom fields on items
  • Assign a default class to an item -> great for reports of sales by class
  • Track Inventory in multiple locations and bin locations within the warehouse
  • Use FIFO Inventory costing method
  • Track Inventory with Serial Numbers or Lot Numbers
  • A fixed labor allocation cost can be added to inventory assemblies
  • Basic USB Compatible Barcode scanning in transactions such as Sales Receipts, Invoices, and Item Receipts
  • Use barcode scanner to scan serial number or lot number (assuming they are in a barcode format) AFTER the item has been selected in the Item Receipt, Bill, Sales Order, Sales Receipt, or Invoice
  • Basic Mobile (Android Phone) Pick/Pack/Ship Solution
  • Track Vendor Part Number, in addition to Manufacturer’s part number
  • Mobile (Android) based cycle counts and Mobile (Android) PO receiving
  • Advanced Pricing of items based on multiple criteria (Customer Type, Date, and Volume Sold)
  • Calculate Sales Price on items based on Purchase Cost (default item cost) with default margin/market per item
  • Track different costs for an item across multiple vendors up to 4 alternative vendors (QuickBooks Enterprise Platinum 2020).  Note: but NOT at multiple currencies
  • Allocated Landed Cost (from other bills that contain shipping, customs, insurance, etc.) into inventory item cost (QuickBooks Enterprise Platinum 2020)

What QuickBooks Enterprise CANNOT do with Inventory (as of version 2021):

  • It cannot track lead time functionally to estimate the arrival date of a product purchase, although the lead time can be stored in the preferred/alternate vendor table
  • It cannot suggest a vendor to choose for ordering an item based on vendor’s price and/or lead time; even though both of those items can be stored using the Alternate Vendors feature, those fields do no interact with any functions inside QB, they are simply queryable information on the screen.
  • It cannot track both Serial Number AND Lot Numbers
  • It cannot handle Serial number controls. While QuickBooks can track serial numbers, it cannot prevent a user from choosing the wrong one or leaving a serial number out of the transaction.
  • It cannot have unlimited Serial Numbers in a single line: there is a limit of 4096 characters in a single item line, so you would be limited to the qty of serialized items you can enter in a transaction line when you multiply QTY X Serial Number character length.  Workaround is to use multiple transaction lines
  • It cannot print serial number labels or serial number barcode labels
  • It cannot generate and assign random serial numbers
  • It cannot track warranty dates based on serial number
  • It cannot scan QRcodes with multiple lines of info
  • It cannot track Expiration Dates (Although, Lot Numbers could be used as workaround)
  • It cannot produce Inventory Forecasting Reports
  • It cannot provide Proactive notifications of Inventory Levels
  • It cannot group Inventory into Categories (other than using sub-items or classes – which is sort of a workaround – custom field is another workaround, would reporting might require 3rd party app)
  • It cannot use the barcode scanning function for inventory adjustments.  (Although you could use the android/scanner option to perform cycle counts)
  • It cannot use the barcode scanning function for building an inventory assembly
  • It cannot use the barcode scanner to create new items into the database based on the “information contained inside the barcode”
  • It cannot use the barcode scanner to convert Sales Orders into Invoice when they are ready to be shipped
  • It cannot use the barcode scanner to print transactions
  • It cannot use the barcode scanner to recognize multiple units of measure of an existing product (for example if the product has a barcode for the unit, but also an alternative barcode for a box of 12 – which is on the box). This means you need to OPEN the box and scan the individual unit if that is the barcode programmed into QuickBooks.  In other words, you cannot have multiple SKU’s that point to the same item and based on that SKU, it affect the item based on unit of measure.  The unit of measure needs to be selected each item in the transactions manually
  • It cannot use a “smart” barcode scanner that can give you information about the product when scanned
  • It cannot directly scan the serial number or lot number (assuming they have a barcode format) into a transaction. In other words, the item needs to be selected or scanned FIRST, then you can add the serial number or lot number with the barcode scanner
  • It cannot use the wireless barcode scanner to create standalone transactions from the scanner: such as invoices, sales receipts, purchase orders, etc.  In other words, all transactions MUST originate from QuickBooks, and you cannot convert a sales order to an invoice from the scanner, for example.
  • It cannot to Inventory Adjustments on-the-fly using the wireless warehouse app with bar.  In other words, it requires a formal Cycle Count to be generated
  • It cannot calculate Individual FIFO layers per Lot
  • It cannot calculate Specific Cost Identification with Serial Numbered products
  • It cannot produce Inventory Turnover Ratio Reports
  • It cannot generate a Report of all Open Sales Orders that contain Inventory Assemblies with their Bill of Materials details (you MUST manually create Inventory Assembly Builds in PENDING status to have something similar)
  • It cannot create a shortage report or required materials report based on bill of materials from open Sales Orders with Inventory Assemblies
  • It cannot have Bill of Materials with some items subject to markup and some not.  (in other words, all bill of materials cost would be subject to a default markup/margin)
  • It cannot Track volume discounts on purchases
  • It cannot handle Inventory Matrixes (style grids) so every item/sku/price in matrix would need to be its own item
  • It cannot handle SKU numbers, there is a field for the item name, for the barcode, and a manufacturer’s part number.  If you need to also track an SKU number as well, you would need to use a custom field; which is searchable but not easily accessed
  • It cannot have Product Alternatives to suggest when there is a shortage (substitute product)
  • It cannot restrict an user to sell product at specific price, price range, or above cost
  • It cannot create a non-Sellable site location (like in-transit locations) so all locations are eligible to sell from
  • It cannot create “Work Orders” or “Manufacture Orders” – a Pending Build would be the closest workaround if you need to have a list of Bill of Materials components tied to a specific item to be assembled.  If you need a list of all the components from multiple BOM’s from one Sales Order, there is just no way to solve this issue without the need of a 3rd party app.  This is a true issue for many manufacturers
  • It cannot account for scrap during manufacturing process (would require a manual adjustment)
  • It cannot create Assemblies from Sales orders
  • It cannot produce a warning/pop-up indicating user is selling item bellow target margin/profit
  • It cannot setup a default markup/margin sales price calculation across the board
  • It cannot do an automatic/dynamic Sales price recalculation based on default margin/markup when bill of materials components cost changes
  • It cannot manage different statuses in the manufacturing process, there is only one status for assemblies (built or not built)
  • It cannot do multilevel bill of materials (but it can do nested assemblies – every build will create additional/separate builds for subassemblies)
  • It cannot track a component cost of less than $.01
  • It cannot calculate labor or overhead costs based on routing steps or a routing sheet
  • It cannot handle unlimited part numbers/names in a stable way.  QuickBooks Enterprise starts having performance issues after about 25,000 items (but circumstances are different across QB Files, in theory a very low volume -less than 1000 transactions a year- in sales company could have 50k to 100k items, but its rare to have a company with so many items with low volume)
  • It cannot notify or warn you when you are running low on a particular item or getting close to the reorder points
  • It cannot handle unit rounding when it comes to automated reordering inventory.  If you have 1.8 units on hand and the reorder point is 5, it will suggest 3.2 instead of 4.
  • It cannot automatically generate a purchase order to replenish inventory based in historical purchases or historical sales.  In other words, no mechanism for inventory forecasting.  HOWEVER, is can create PO’s to fill in inventory up to the Max Reorder point for items under the Min Reorder point.
  • It cannot handle minimum order quantities or required multiples.  There are cases in which a vendor will only sell you at least 48 units and can only sell you 12 units at the time
  • It cannot perform an inventory assembly build if components are out of stock, it creates a pending build and slows down the process (probably for the better)
  • It cannot prevent others from selling specific items in a Lot Number or Serial Number that has been placed into a Sales Order.  In other words, the existence of the Sales Order does not block the use of those items
  • It cannot limit QuickBooks to only allow partially fulfilled sales orders to be created into an Invoice.  In other words QuickBooks will allow the user to convert a Sales Order into an Invoice even if items have not been picked/packed via the mobile warehouse feature
  • It cannot report on the raw materials (BOM components) that are required for the future based on assembly items inside Sales Orders or Estimates
  • It cannot be used to schedule, plan, track the status of a manufacturing process (Inventory Assemblies)
  • It cannot estimate or allocate for you units of labor or overhead based on historical costs.  Any labor/overhead calculation that needs to be added to an inventory assembly is a manual calculation
  • It cannot initiate an inventory site location (or Bin Location) transfer from the wireless android device
  • It cannot isolate a specific bin location for inventory adjustments, it works with inventory sites but cannot drill down to just the bin
  • It cannot print item labels (with or without barcodes) directly from a transaction
  • It cannot track “list price”, it can only track SALES PRICE or COST, so if you have a price table or price rule, it needs to be derived from SALES PRICE or COST.  However, you can enter a list price as a reference in a custom field, but it will NOT interact with your pricing calculators.
  • It cannot track or group items by categories.  Items could be structured with a hierarchical item:subitem list, but if you use a custom field to group items intro categories or any other logical grouping, you cannot create reports summarized by or pivoted with custom fields

The “Warehouse Management app” available for Android phones (and Combination Phone/Barcode Scanners such as ZEBRA TC21 and Zebra TV51) has some additional or limited functionality limited to these 3 actions:

  1. Sales Order Fulfillment
  2. Purchase Order Receiving
  3. Cycle Counts

Read this article with conjunction with: “QuickBooks Mobile Warehouse Management app


So when choosing an accounting/inventory Management system, it’s important to know what It can or cannot do.   If you are using QuickBooks Online and want to add some Inventory manufacturing functionality, there are some apps that seem to work well:

  • Katana Manufacturing
  • SOS Inventory
  • LOCATE Inventory

If you are using QuickBooks Desktop and want to remain in Desktop, but use an app for Inventory, there are a few popular apps for that as well:

  • Fishbowl Inventory & Manufacturing
  • MISys
  • Acctivate!
  • Order Time Inventory
  • LOCATE Inventory


Lastly, ut is also important to acknowledge, that adding additional apps increases both the software costs and the complexity, and in some cases, devising a workaround inside of QuickBooks to achieve something it wasn’t designed to do, but with a similar end results, is the best temporary choice… And, because of all these potential moving parts, an implementation consultation with clients, trying to decide if QuickBooks is the right solution for their inventory-based business, these are the type of questions I ask:

  • On a scale from 1-10, how confident are you on your current accounting system’s valuation of inventory?
  • What is the margin of error from your current Inventory Valuation report?
  • Do you sell “online”; through a website, or other web-based channels like Amazon or eBay?
  • Do you feel that the right products are being inventoried? (Other words, are there items that are “non-inventory” in nature, but being tracked as inventory or vice-versa?)
  • When was your last complete physical inventory done? How often are they done?
  • Do you perform segmented cycle counts? (In other words, counting a small group of sku’s in a cyclical basis)
  • Do you ever do VALUE adjustments (this is different that usual QUANTITY adjustments)
  • Do you use unique (internally created) part numbers or do you use the vendor/manufacturer’s part number? (or both?)
  • Do you sell custom and/or unique items that a are only sold once in a lifetime (for a specific customer or job)?
  • If you were to classify your inventory in groups, what would those groups be? (for example: Shirts, Pants, Shoes, etc…)
  • Do you have a pre-designated space in the warehouse for every product? (such as cages, racks, or bins, that are uniquely numbered)
  • How many people perform activities that can affect your inventory? (for example, anyone that creates a sales order and/or promises the customer a product, anyone that creates purchase orders, anyone that receives inventory and/or signs off on the fact they were received, anyone that creates vendor bills from inventory purchases, and any allows to move product in/out of the warehouse for any reason…)
  • If there are multiple people, please tell me what would you like the desired responsibilities and access restrictions to each of these people that are affecting the inventory.
  • How often do you take product out of the warehouse for “giveaways”, samples, and/or internal consumption that are not necessary “sold”?
  • Are there multiple warehouse locations? And do you have inventory in consignment (physically under the position of your customer, but they belong to you until they are sold)?
  • Do all your products come with barcodes from the vendor/manufacturer? And/or do you manually add barcodes to the packaging?
  • Do you have product with lot numbers and/or serial numbers? Do you have product that expires?
  • Do you track raw materials separate than finished goods? Do you track Work in Process for partially processed raw materials?
  • Does the cost of the product vary greatly throughout the year? Do you have any thoughts around the value of using “First-In First-Out” inventory, rather than avg. costing?
  • Do your customer pick-up the product from your warehouse? And/or do you ship to them directly? Do you do “drop ships” (where the product goes from the vendor/manufacturer to the end customer)
  • How easy or challenging is to physically find products in the warehouse?
  • How easy or challenging is to physically find products inside your accounting system when purchasing or selling a product?
  • Are there “old”, inactive, or unused products in your accounting system that need to be cleaned up?
  • Do the dates in which the you physically receive the inventory and the date that you receive the bill for that inventory vary? Do you often have discrepancies in the qty and/or price in the bill from the original PO?
  • Do your vendors send you an updates item/price list regularly? If so, do you “import” them?
  • Is the cost of freight, insurance, and/or other direct costs included in the valuation of your inventory?
  • Do you base the sales price of your products as a markup directly from your costs? Or do you have a fixed “list” or retail price for the products?
  • Do you give your sales people “wiggle room” on setting sales prices? Or Do your customers get a specific price/discount based on the “type” of buyer they are or the volume they generate?
  • Do you pay sales commissions? Based on gross sales? Or gross profit?


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