When Do I use Categories and Items?

The following is not intended as accounting advice nor does it supersede the advise of your accounting Professional.

Categories and Items are used when using the Sales Receipt and Itemized Sales Receipt posting methods. The advantage of using Categories and Items is they allow easier classification and grouping of products and services. This enables simpler tracking and searching of transactions.

NOTE: Do not confuse with Classes and locations used on QuickBooks Online.

When configuring Shogo account settings and selecting the posting method of Sales Receipt or Itemized Sales Receipt there are some dos and don'ts to remember regarding Categories and Items. The following is information regarding Sales Receipt and Itemized Sales Receipt and is not intended as accounting advice.

If using the Sales Receipt posting method in Shogo you can NOT use Categories for your Items.

Inventory Items are only available in QuickBooks Online Plus or Advanced. If using the Itemized Sales Receipt and using Inventory items the corresponding Inventory Asset Item must have Inventory PRIOR to the first use in your Point of Sale.

Example: The first sale date for a T-Shirt was May 1st but the Inventory Asset was not created until May 3rd- QuickBooks will reject the sales posting because the inventory start date is after the first sale date.

When setting up your item list, each item must be linked (pointing to) an account on your Chart of Accounts. The General Ledger account must remain active or the post will be rejected by QuickBooks.

Payment type items and Other Charges can not be negative. There cannot be a negative deposit of any kind.

Example: Cash in Drawer can not be a Payment type item - this is Shogo's way to post a negative deposit. Negative deposits can occur when the payouts, cash short, refunds, etc. exceed the cash sales for the day. Refer to "What is Cash in Drawer".

When using QuickBooks Plus and creating Items pay extra attention to the Income Account. The account you select is what QuickBooks will use to categorize income once a sale is complete.

Note: The INCOME account does not have to be an income type of account - you can for example - create an Item for Tips - and point it to your Tips liability account or Merchant Processing fees Item can point to your Fee expense acct.

If in doubt on what type item to use. we recommend using a Service type item.

If you have further questions beyond this article please contact your accounting professional.