Adding Products or Services to QuickBooks
If you’re running a business and using QuickBooks Online to manage your books, keeping track of what you sell, whether it’s physical products or professional services, is essential for clean and accurate records. Whether you’re invoicing a client, managing inventory, or preparing for tax season, setting up your products and services the right way in QuickBooks Online can save you time and money.
What Are Products and Services in QuickBooks Online?
QuickBooks Online (QBO) allows you to create items for anything you sell, from physical inventory like candles or clothing to services like consulting, cleaning, or graphic design.
These items are categorized into two main types:
Products: Tangible goods you sell (e.g., handmade items, resale merchandise).
Services: Tasks or time-based work you perform (e.g., legal consulting, tutoring).
Each item you create can be linked to specific income accounts, which helps track exactly how your business is earning money.
Why It Matters to Add Products & Services Properly
Here’s why it’s important:
Speeds up invoicing – No more typing the same description and price repeatedly.
Tracks income accurately – Every product or service is linked to a sales category.
Helps with reporting – Break down income by item, type, or category.
Supports tax preparation – Cleaner books mean fewer surprises come tax time.
Improves inventory control – For products, you can track quantity on hand, restocking, and more.
A properly set up Products & Services list helps you run a more efficient and insightful business.
How to Add a Product or Service in QuickBooks Online
On the QuickBooks Online dashboard click on the settings (⚙️) icon.
Then under lists, select products and services.
In addition, the products and services menu can be reached by clicking on "Sales" on the navigation bar on the left of the screen.
On the Products and Services Page, click on the green “New” button to create a new product or service.
From here, you can add a service, non-inventory item, service, or bundle of products or services.
In this example, we are putting a service called "Install Driveway". We can also set the service under a category, set a sales price, income type and whether or not the service or product is taxable or non taxable.
After clicking the green "Save and close" button, the "Install Driveway" service has been added along with the "service" type and sales price of $600.
Common Mistakes to Avoid
- Using vague or duplicate names
Use clear, consistent naming so you don’t confuse clients or yourself. - Assigning all items to the same income account
Group items into different categories (e.g., “Product Sales” vs. “Consulting Services”) to make your reporting more useful. - Forgetting to mark taxable items
If you charge sales tax, this needs to be reflected when the item is set up, or you could end up underreporting taxes owed. - Not using inventory tracking when needed
If you sell physical goods, use the inventory feature to avoid overselling and to track restocking needs.
Best Practices for Products & Services in QBO
- Review your item list monthly
Archive or inactivate items you no longer use to keep things clean. - Customize descriptions for clarity
The clearer your invoices, the fewer client questions you’ll receive. - Use custom categories and sub-accounts
Break down income by service type, product line, or department to gain deeper insights. - Train your team
If multiple people send invoices or create sales receipts, make sure they know how to select the right items.
Adding your products and services to QuickBooks Online may seem simple, but it’s one of the most important foundations for clean books and accurate reporting. Take the time to set them up correctly, organize them clearly, and link them to the right accounts. Your future self (and your accountant) will thank you.
Need Help Setting Up QuickBooks the Right Way?
If you’re just getting started or want to clean up your product/service list for smoother invoicing and smarter reporting, we offer QuickBooks Online Tune-Ups and Setup Services.
- Review your setup
- Create custom item categories
- Link everything to the right income accounts
- Provide a walkthrough to keep you in control