QuickBooks Online has 4 item types available on the Products and Services List.

Note: Inventory tracking is only available in QuickBooks Online Plus.

Product/Service types

  • Inventory item: Items you buy and/or sell and that you track quantities of.
  • Non-inventory item: Items you buy and/or sell, but don’t need to (or can’t) track quantities of. For example, nuts and bolts used in an installation.
  • Service: Services that you provide to customers.  For example, landscaping or tax preparation services.
  • Bundle item: The Bundle item type is used in cases where you have a collection of products/and/or services that you sell together, for example, a gift basket of fruit and cheese and wine. 
    • You have a choice on whether you want to display Bundle components when printing or sending transactions.  When editing the Bundle item look for the checkbox under the heading, Products/services included in the bundle, and select how you want your Bundle items to appear.
    • Note: The Bundle item type can be created and used in the browser version of QuickBooks Online only; it is not supported in Android or iOS mobile apps at this time.
Tip: The Item or Service designation has no impact on sales tax.

Product/Service type changes

Change Services to Non-inventory items:

  1. Select the Gear icon at the top, then Products and Services.
  2. Select all the Services to be changed to Non-inventory items by using the check boxes next to each service name.
  3. Select Make non-inventory item from the Change type drop-down.

Change Non-inventory items to Services:

  1. Select the Gear icon at the top, then Products and Services.
  2. Select all the Non-inventory items to be changed to Services by using the check boxes next to each item name.
  3. Select Make service from the Change type drop-down.

Change Non-inventory item or Services to Inventory items: 

Important: this change is not reversible.

  1. Select the Gear icon at the top, then Products and Services.
  2. Select Edit for the item to be changed to Inventory item.
  3. Select Make inventory item from the Change type drop-down.
  4. Scroll down and enter the Initial quantity on hand.
  5. Enter the As of date (Note: As of date needs to be a date prior to any transactions that use this item).
  6. Enter Inventory asset, Income, and Expense accounts.
  7. Enter Sales Price, Cost, and Sales/Purchasing descriptions.
  8. Select Save and close.
Note:  Once any item type is marked as an Inventory item, it cannot be converted to any other type.  If the item is classified as an Inventory item and needs to be changed, a new item needs to be entered in its place and marked for the appropriate type.

Why can't an Inventory items be changed to either Non-inventory items or Services?

Quantity on hand tracking can't be disabled on Inventory items because they are tied to an Inventory asset account.  Once you begin tracking quantity on hand for an item, values for that item are created and tracked on your company's Balance Sheet.  This restriction is deliberate because turning off inventory tracking on an item doesn't make the value for that item go away on your company financial reports.

If you want to change an Inventory item to a Non-inventory item and that item still displays quantity on hand, you need to either sell all inventory that you have on hand or adjust the item so it shows zero quantity on hand before inactivating the item.  This will insure the inventory asset account is a zero value for that item.  Once adjusted, create a new non-inventory item with the same name.  It should be noted that even though the item shares the same name as the previous inventory item, it will be a different item and have its own history.

If you never intended to track the value of an item and entered quantities on hand in error, complete these steps to correct it:
  1. Adjust the item so it has zero quantity on hand
    1. Select the Gear icon at the top, then Products and Services.
    2. Select Edit for the item. 
    3. Select Update under Quantity on hand.
    4. Enter 0 under New quantity on hand.
    5. Select Save and Close.
  2. Find the total of the quantity adjustment in the Inventory Shrinkage account
    1. Select the Gear icon at the top, then Chart of Accounts.
    2. Locate Inventory Shrinkage and select Run Report
    3. Under the Amount, jot down the $value
  3. Enter a Journal Entry debiting opening balance equity and crediting inventory shrinkage
    1. Select the Plus icon (+) at the top, then  Journal Entry.
    2. Under Account, select Opening Balance Equity enter the $value you wrote down in step 2 under Debits.
    3. Under Account, select Inventory Shrinkage and enter the $value you wrote down in steps 2 under Credits.
    4. Select Save.

Here's a summary of the item type changes we support:

From To Batch Edit Single Edit
Inventory Non-inventory No No
Inventory Service No No
Inventory  Bundle No No
Non-inventory Inventory No Yes
Non-inventory Service Yes Yes
Non-inventory Bundle N/A N/A
Service Inventory No Yes
Service Non-inventory Yes Yes
Service Bundle N/A N/A
Bundle Inventory N/A N/A
Bundle Service N/A N/A
Bundle Non-inventory N/A N/A