Maintaining Inventory in SME - Use General Ledger Entries for Default Material

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Inventory items can be maintained solely in SME. To configrue SME to correctly record the inventory accounting transactions in QuickBooks you must set the correct options in SQLink. Set the Use General Ledger entries for Default Material Item as shown in the image below. With this setting, SQLink will create General Ledger Account entries in QuickBooks when items are received on SME Purchase Orders (Debit Inventory Asset / Credit Accounts Payable) and when you invoice material in SME (Credit inventory Asset / Debit Cost of Goods Sold). These settings require that the default material item must be a Non-Inventory item. You can use the default established when SME/SQLink is installed, or you can set up an item of your own choosing, but it must be a Non-Inventory item.


Using this option applies only if you keep your inventory items in SME only, not in both SME and QuickBooks.


UseGeneralLedgerOption.png


Setup

Setup your default Inventory Asset and COGS Account

1. Open SQLink
2. Click File > Setup
3. Click the Classes and Accounts Options tab
4. Click Edit at the bottom
5. Set your Default Inventory Asset Account and Default COGS Account
SetDefaultCOGSAndAssetAccounts.png

Setup your Default Material Line Item

1. In SQLink, click the Invoice/ Proposal Options tab
2. Locate the Default Material Line Item field. The item set in that field by default is a non-inventory item called “SMP_Item”. You can leave that item or set another non-inventory item you already have setup, however the item must be a Non-Inventory item.
SetDefaultMaterialLineItemSQLInk.png

Set Income Account on your Default Material Line Item

If you keep SMP_Item as your Default Material Line Item you will need to set the income account on SMP_Item in QuickBooks.
1. Open QuickBooks
2. Click Lists > Item List
3. Look for SMP_Item and open the item.
4. Set the Income account in the Account field (image below).
5. Make sure you keep the item as a non-inventory part. Do not change this.
SMPItem SetIncomeAccount.png

Setup your Purchase Order Options in SME and SQLink

1. In SME, go to the Setup module > Company > Order
2. Click Edit
3. Check Default Export Bills on POs (Image below)
4. Click Save.
DefaultExportBillsOnPOs SMESETUP.png


SQLink PO Bill Settings:
1. In SQLink, click File > Setup
2. Click Edit at the bottom
3. In the Purchase Order Options section, check Export Bills Only (image below)
4. Click Save
SQLINK OnExportExportBillsOnly.png


To see how Bills for POs export to QuickBooks, view the video at this link:
http://high5software.com/mediawiki/index.php?title=Default_Export_to_QuickBooks_Settings#Export_Options_for_Purchase_Orders

Purchase Order for Inventory and Non-Inventory Items

If you create a PO in SME, the PO will be in SME only. Receive an item on the PO and on your next sync, a bill will go to QB for the item you received. The image below shows the bill in QuickBooks for the SME Purchase Order #4128.
QB BillForItemsReceivedOnPo.png
The following entries are made in QB from the Bill:
GLENtriesone.png
A Credit was made to Accounts Payable account and a Debit made to the Inventory Asset account as shown in the report below.
QBAccount Bill.png

Invoice for the Inventory Item - GL Entries

Invoice the material in SME. On your next sync, the invoice will sync to QB (image below)
QBInvoiceForMaterial.png


The following GL entries are made in QuickBooks:
MaterialInvoiceGL.png
A Credit was made to the Inventory Asset account and a Debit made to the Cost of Goods Sold account as shown in the report below.
InvoiceGL.png