Set up initial cost for inventory items in QuickBooks Online

Learn how to set up initial cost for your inventory items in QuickBooks Online. 

Inventory features are available for QuickBooks Online Plus and Advanced. If you don’t have Plus or Advanced, upgrade your QuickBooks plan to start tracking your inventory.

When creating a new product or importing from a sales channel into QuickBooks using Commerce, you’ll need to add in the initial cost for each product. Initial cost is the total amount you paid to get the product and may include shipping, freight, sales tax, and customs. Adding initial cost helps you keep an accurate cost of goods sold and accurately track your profit margins.

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Add initial cost

QuickBooks will prompt you if some of your inventory doesn't have an initial cost added. You’ll see this on your Products & Services list or as part of the Commerce set-up checklist after connecting a sales channel.

1. Go to Sales, then select Products & services (Take me there).
2. In the initial cost notice, select Add now.
3. Select Add Initial Cost.
4. In the Initial Cost column, add the initial cost in the field for each product listed.
   • If the product has variants, you’ll see how many variants you’re adding the initial cost for.
   • If variants need different initial costs, select the product to view its variants and specify initial costs. 
5. Select Finalize. 

Note: If you need to adjust the initial cost later, edit the starting value of the variant.