Our company is a distributor of building products (doors, cabinetry, millwork, windows, etc) using QB Enterprise (Desktop) General Business version. We use inventory items and non-inventory items. Tracking COGS for non-inventory items has been a challenge. The doors, cabinetry, and windows we order from manufacturers are all different for each order with different qualities and costs, so we use generic item names for each category ( ie: all doors use item name: DOOR). When the vendor bill is received, it would go directly into COGS. But we may not invoice our customer until the following month. That means we have COGS in one month, and the revenue in another which results in incorrect reporting.

For the last 8 years, we changed that so when a vendor bill is received, those cost values go into a current asset account (like what an inventory item does) and when it comes time to invoice our customer, we then manually move those costs from the asset account into COGS to get accurate reporting in any given month. That process works, but when you are nearing a thousand of these per month, it gets tedious and it's easy to make a mistake or miss one of them. I have to compare a sales report of the month against a report of the corresponding asset account and find the specific item. After they're moved to COGS, I then have to reconcile the asset account to clear them out so they don't show up again on next month's report.

We are getting ready to re-create those non-inventory items as inventory items. But we can't use the same item for every door, because average costing will not work, nor would FIFO. So we'll need to create a new inventory item for each door - or for at least each order or job (ie: item name will be "DOOR-<sales order#>"). My problem with this, is that there will be a TON of new items being made by sales people and they'll have to ensure they're choosing the right asset/COGS/revenue accounts when making these items. I can already see the mistakes coming.

There needs to be a better way.

We have explored using the non-inventory items as billable expenses, but doing that duplicates the items on the invoices we make because we create our invoices from sales orders which already have the items on them with pricing.  And we must have our sales orders for fulfilling orders in our warehouse.

Does anyone have any other methods they use?

I wish we could use billable expenses without those items being duplicated on the invoice when they're already on it from the sales order.