Converting Inventory from QuickBooks Desktop to QuickBooks Online
I’m going to focus on the issues related to how inventory part items convert from QuickBooks Desktop to QuickBooks Point of Sale QuickBooks Point of Sale
We know how complex retail can be, So we make it easy. QuickBooks Point of Sale . Given that we want to track quantity in QuickBooks Point of Sale , you need to have a subscription set up for QuickBooks Online Plus, which is the only version of the product that supports tracking the quantity on hand of products.
Before you start converting, though:
- If you already have a QuickBooks Online account, you can only convert the desktop data to the online version within the first 60 days of your subscription – UNLESS you are a QuickBooks ProAdvisor, in which case you can convert to your own subscription any time.
- This conversion will overwrite any existing data in an existing QuickBooks Online file, not update it.
- You must log in as the Admin user in QuickBooks Desktop.
- If you are converting to an existing QuickBooks Online company, you must have Administrator level permissions.
- If you have enabled the multi-currency feature in your QuickBooks Desktop file, you cannot convert this file to QuickBooks Online.
- Intuit’s support site says that you cannot convert a QuickBooks desktop file that has more than 350,000 “Targets.” I thought that someone at Intuit had told me that this is no longer a limit, but I can’t tell if that is the case or not. To know how many “Targets” you have, open your desktop file and press the F2 key (or Ctrl-1). “Total Targets” is one of the values listed on the left of the Product Information window that opens.
- You want to be sure that your desktop file is clean and error-free before converting. Perform a “verify” of the file first, to see if it is OK.
- We are focusing on inventory in this article, but note that there are some things that won’t convert exactly. QuickBooks Online is very different than QuickBooks desktop, even though they share a name. For a detailed listing of what will or won’t convert, see this article: https://community.intuit.com/questions/1145236-why-some-data-doesn-t-come-over-from-quickbooks-desktop Note that because QuickBooks Online is evolving rapidly, some of the information on this page can be a bit out of date, unfortunately.
- Note that “Group Items” will not convert.
Intuit is working on adding features to QuickBooks Online so that more and more transactions and features will convert, but it is going to take time.
Let’s take a look at my item list in QuickBooks desktop (Windows version). I have a very simple example so that we can easily see how information will flow. I have one each of four item types: Service, Inventory Part, Inventory Assembly, and Non-inventory Part. Only the Inventory Part and Inventory Assembly items will have a quantity on hand.
Print Reports Before Converting
Prior to any conversion I always print a number of reports from the source file. Since we are focusing on inventory, I will only show the reports that reflect the status of my inventory. You would also want to print reports that show the status of other lists and accounts, such as a Profit and Loss statement, aged receivables and payables reports, and more.
Here’s my Balance Sheet in the desktop program. Note that in this test case I am using only one inventory asset account for all of the Inventory Part and Inventory Assembly items.
I also like to print a Inventory Valuation Summary prior to conversion. Hopefully the total valuation in this report matches the Inventory Asset balance in the balance sheet. If not, you shouldn’t proceed with the conversion until you have this corrected.
Start the Conversion in QuickBooks Pro and Premier
I’m focusing on converting QuickBooks inventory, but it is a part of the overall conversion process. To start the conversion with a current version of QuickBooks Pro or Premier, look for Export Company File to QuickBooks Online in the Company menu. If you are working with QuickBooks Enterprise you won’t find this menu option. I’ll explain how to convert that kind of file later in this article.
Selecting this should open a captive browser window (using Internet Explorer) that asks you to either sign in to your QuickBooks Online account or create a new one. I think that this is slightly misleading, as I believe that this is actually asking for your “Intuit ID.” That is a bit different than saying this is a QuickBooks Online account. Your Intuit ID is used for any Intuit-related sign-ons that you have. This could include a TurboTax Online account, a ProAdvisor account, and others. Normally a user is going to have one Intuit ID, but not always. So, you may already have an Intuit ID. Rather than create a new Intuit ID, you want to use an existing one if you have it. Even if you don’t have a QuickBooks Online subscription on that account yet, use your existing ID. But if you don’t have an Intuit ID, create one here.
After you sign in you should see the following screen. Note that this is a new feature added in the August 2015 update of QuickBooks Online. This is wonderful, because in the past you did not have the options shown here, and converting Inventory Part items was a major, major hassle
Since we are talking about converting you Inventory Part items, with their quantity on hand, you want to select Yes, turn on inventory…
Note that you are asked for an “as of date.” I’ve discussed the importance of this date in prior articles in this series. Whatever date you choose, remember that you cannot enter new transactions that are dated before the “as of date.” Usually when converting an existing QuickBooks desktop file this isn’t a problem, because you already have your historical transactions entered in the older desktop file. Where we often see issues, though, is when someone converts their desktop file and uses the current date, and then tries to post transactions via an integration with a web store. Those transactions may be from the past several days, and they can’t post if the “as of date” isn’t set far enough back.
In most cases the recommended date should be the first day following your company’s last tax filing period.
Continuing from this step you may be asked about where to store this data. Do you want to update an existing QuickBooks Online company or create a new one? In my case I have multiple QuickBooks Online accounts associated with my Intuit ID, so there is a dropdown list of choices. As noted, be careful, because this will overwrite (not update) your existing QuickBooks Online data if you pick an existing company file. Alternately, you can create a new QuickBooks Online account. Again, keep in mind that in the earlier step you may have created a new Intuit ID, but this is the step where you can create a new QuickBooks Online subscription for that Intuit ID.
I always set up my QuickBooks Online Plus account ahead of time rather than creating it here. I think it works more smoothly, with less chances of making a mistake and selecting the wrong kind of account.
Now that we have our accounts all lined up, press Continue and we see the final screen:
Your data is being sent to the Intuit servers and it will be converted there. When the process is done, you will get an email message similar to what I show below. In my test case this took just a few minutes, but my test QuickBooks desktop file wasn’t that big.
Dang, I hate it when I get an email that has me log in to an account by clicking on a link. There have been a LOT of phishing emails flying around lately where the bad guys are trying to get me to click on a link to enter my Intuit credentials so they can steal my information. And this email message has some little things that seem like clues that it is spam (even though it isn’t), such as mismatched copyright dates. Oh well, you don’t have to actually click on that link if you know how to log in to QuickBooks Online. This is another good reason to set up your QuickBooks Online account before doing the conversion, so that you know how to log in. Also, since we are expecting this email, odds are that you can trust it. Am I being a bit paranoid? Darn right I am! But by being careful, I haven’t been scammed yet.
Verifying the Results
Once the conversion is done and you have received the notification, you can log in to your QuickBooks Online account. You’ll see a helpful window, as below:
A couple of things to note here:
- Regardless of what you named your QuickBooks Online company file, if you set it up ahead of the conversion, the name will be changed to what you were using in the QuickBooks Desktop file. That is fine – and you can always change it to something else from here.
- If you had any bank accounts connected to your desktop file you will have to re-connect them in QuickBooks Online.
- In that “finish” screen you see a note about IRS Form 3115. Click on the link and you see the notification shown below. This is very important because you are changing from “average cost” in QuickBooks Desktop to “FIFO cost” in QuickBooks Online. If you aren’t familiar with this form and why you need it, talk to your financial advisor!
Let’s take a look at how things converted. As I briefly mentioned earlier, Intuit made some significant changes in the process in their August 2015 update. Prior to that the “track quantity on hand” option would not be enabled, and any transactions that included inventory part or inventory assembly items would convert poorly, adding multiple lines to some transactions for each kind of account that an item posted to. Intuit fixed this issue!
Looking at the QuickBooks Online settings, you see that the Track quantity on hand setting was enabled by the conversion process automatically.
Looking at the Balance Sheet, it matches. Always important to check this!
Click on the Gear icon at the upper right of the QuickBooks Online window and select the Products and Services list. This looks very different than what we see in QuickBooks desktop, but the information we need is there.
Some interesting results here, mostly good, but an odd problem:
- The Service item, “Photo Retouching,” converted as a Service type. Good!
- The Inventory Part item, “Canon Lens,” converted as an Item type, and the quantity on hand came across correctly. Good!
- The Inventory Assembly item, “Photo Promo Kit,” converted as an Item type with the proper quantity on hand. Note that at this time QuickBooks Online doesn’t support inventory assemblies with a bill of materials. So this is the best that it can do. It worked as expected.
- I didn’t have a Group Item in the original desktop file, but if I did then it would not convert (this may be supported in upcoming releases of QuickBooks Online).
- The Non-inventory Part item was changed to an Item type, which it should, but why does it show a –1 quantity on hand? That is odd! Even though there is a Cost associated, and a quantity, this didn’t affect the Balance
- Sheet, so is there a problem? However, if you edit this item you will see that the “I track quantity on hand” box is not checked. That means it should not show a quantity in this list, which is what I would expect. I’m still investigating this, but I haven’t found a problem other than this report showing incorrectly. But I’m just starting to dig in on this. Note that this area, “noninventory items,” is an area where Intuit is making a lot of changes. You don’t see the term “noninventory item” anywhere other than in the Import feature (at the time I’m writing this) but you will see that term used more widely in the future.
So, other than that one odd thing with Non-inventory Parts, everything seems to work very smoothly.
This is a great improvement over how it worked before the August 2015 update.
Converting QuickBooks Enterprise to QuickBooks Online
What about converting QuickBooks Enterprise company files? Well, it can be done, but my first question would be, Do you really want to do that? QuickBooks Online doesn’t come close to offering the features that QuickBooks Enterprise users are used to, particularly when you think of inventory, so I find it unusual to find someone who will be happy with this kind of conversion. However, if you want to convert from QuickBooks Enterprise, the method isn’t obvious. The menu option I showed earlier doesn’t exist.
To convert QuickBooks Enterprise to QuickBooks Online, start by pressing the F2 key (or Ctrl-1) to open the product information window.
With this window open, press Ctrl-b once, and then Ctrl-q. Nothing will appear to happen, but don’t worry about that (“Ctrl-b” means hold the Ctrl key down and press the letter b).
Now, close the Product Information window by clicking OK. Shortly after you close this window you should see the Export to QuickBooks Online window appear, as I’ve shown above. If it doesn’t, try it again, sometimes it seems to take two tries.
Converting QuickBooks for Mac to QuickBooks Online
I don’t work with QuickBooks for Mac so I’ve not tested this. I’m told that you can transfer your QuickBooks Mac data to QuickBooks Online as long as you have QuickBooks for Mac 2016, QuickBooks for Mac 2015 R4, QuickBooks for Mac 2014 R2, or QuickBooks for Mac 2013 R11. See the details here: https://community.intuit.com/questions/1020825-convert-a-quickbooks-mac-file-to-quickbooks-online-edition