I am posting this question for a client of mine who is new to QuickBooks and they have asked me to research a setup issue for their company in QuickBooks
2006. They are in the business on buying and selling fuel (gasoline, diesel, kerosene, and heating oil) and they wanted to know the best way to configure their company in QuickBooks for this business. Specifically, they will buy fuel from a vendor and enter that into QuickBooks as a bill. Since they will be reselling the fuel to their customers, it looks like the best way to record this transaction is to setup Items for these expenses and record them in the bill using the Items tab. This has the benefit of enabling them to track the unit cost for the fuel on the bill. They will then select the Customer:Job that they will ultimately resell the fuel to and invoice for the cost of the fuel.
They sent me their company file so that I could review it and they have already setup Items for the fuel using values similar to the following:
Name - Gasoline 87 Type - Non-inventory Part Account - Sales Income:Gasoline
They are using these Items to create the invoices for their customers that buy the fuel from them. Since these Items are coded with an account of Sales Income, QuickBooks objects to their use when creating a bill. Based on my experience with QuickBooks, it looks like they should also code a parallel set of Items to be used to entering bills except that these Items would be assigned an Account type that is an expense (they have created expense accounts for like "Goods Purchases (Cost of Goods):Gasoline"). This would enable them to use the Expense Items for creating their bills and the Income Items for creating their invoices. In addition, since they buy fuel at a wholesale price and apply a retail markup for the sales to their customers, this will enable them to keep their wholesale (Expense) and retail (Income) prices in their Item List.
You may ask why I care about this. Well, they are using some custom software I created with the QuickBooks SDK to handle their daily pricing (yes, fuel prices change daily) for their customers. They use it to quote the prices to their customers, record sales, and generate invoices in QuickBooks. They would like me to enhance the system to be able to retrieve their wholesale prices daily from the fuel company and update QuickBooks with the new prices so that their bills can be generated as well.
Anyway, if anyone has had experience with a similar situation, can you please let me know if I am on the right track or if their is a better solution. Thanks...
Mark