What Does Advanced Inventory Add in QuickBooks Desktop Enterprise, and How Do You Turn It On?

Before you start

• You need QuickBooks Desktop Enterprise Platinum or Diamond. Intuit's pricing page lists Advanced Inventory for those two, not Gold.
• Inventory has to be on: Edit > Preferences > Items & Inventory > Company Preferences, then Inventory and purchase orders are active.
• Switch to single-user mode (File > Switch to Single-user Mode) before you turn on multiple sites.
• Make a backup first. Turning on FIFO recalculates inventory transactions from the start date you pick.
• Talk to your accountant before you change the costing method.

For what each subscription costs, see QuickBooks Desktop Enterprise pricing.

What Advanced Inventory adds

Step 1: Turn on Advanced Inventory

1. 1Go to File > Switch to Single-user Mode.
2. 2Go to Edit > Preferences.
3. 3Select Items & Inventory, then the Company Preferences tab.
4. 4Make sure Inventory and purchase orders are active is selected.
5. 5Select Advanced Inventory Settings.
6. 6Turn on the features you need on each tab, then select OK in both windows.

If Advanced Inventory Settings is grayed out after you bought it, QuickBooks hasn't picked up your license. Go to Help > Manage My License > Sync License Data Online, then close and reopen QuickBooks.

Step 2: Switch from average cost to FIFO (optional)

QuickBooks Desktop values inventory at average cost unless you turn on FIFO. Under FIFO, each sale is costed from the oldest stock you received.

1. 1In Advanced Inventory Settings, open the FIFO tab.
2. 2Select Use FIFO starting on and enter the start date.
3. 3Select OK, then OK again to close Preferences.

Switching is not a small change. QuickBooks recalculates every inventory transaction from the start date. That changes inventory valuation reports, the Balance Sheet, and cost of goods sold on the Profit and Loss. Pick the date with your accountant, and avoid dates inside a period you have already reported. To go back, clear Use FIFO starting on and QuickBooks returns to average cost.

Step 3: Turn on serial or lot numbers (optional)

1. 1In Advanced Inventory Settings, open Serial/Lot Numbers. It may be labeled Serial/Lot Number & Expiration Dates.
2. 2Select Activate Lot or Serial Numbers, then choose Serial Numbers or Lot Numbers. You can only use one.
3. 3Under Show serial or lot number in, pick the transactions that should show the field.
4. 4To require a number, select Make serial or lot number mandatory for the selected transactions.
5. 5Select OK.

Assign numbers to stock you already have with an adjustment: choose Serial Number or Lot Number as the Adjustment Type. See How to adjust inventory quantity and value. Intuit lists expiration dates for Enterprise Platinum and Diamond, versions 2023 and 2024. They come with an Inventory Expiration Status report under Reports > Inventory.

Step 4: Turn on barcodes (optional)

1. 1In Advanced Inventory Settings, open the Barcodes tab.
2. 2Select Enable Barcode, then Open Barcode Wizard.
3. 3Choose the item field to use as the barcode. Pick one that is unique for every item, such as Item Name or Part Number.
4. 4Choose the item types that need barcodes, then select Next and Finish.

A USB scanner works if it reads EAN-13 and Code-128 barcodes and ends each scan with a single carriage return. Serial port scanners don't work. The warehouse mobile app and the Sales Order Fulfillment Worksheet need a different type of scanner.

Step 5: Set up sites and bins

Multiple sites need the most setup: a site list, opening transfers, and site reorder points. We walk through it in How to track inventory by site.

Turning features off later

• You can turn off one feature and keep the rest. To turn off Advanced Inventory completely, turn off every feature you use.
• Turning off multiple sites keeps the site data but hides it, and new transactions no longer get a site.
• If you turn sites back on, you assign a temporary site to everything entered in between. Then you transfer that stock to the real sites.
• Turning off barcodes keeps the barcodes in the file. They come back if you turn the feature on again.

Where QuickBooks Desktop leaves the work to you

• Advanced Inventory tracks stock only. It doesn't split income and expenses by location, so you still need class tracking for that.
• With mandatory serial or lot numbers, each transaction type you selected needs one before it saves.
• Changing the costing method restates inventory and cost of goods sold from the start date.
• Picklists and cycle counts still need people in the warehouse to pick, scan and count.
• Every site, bin and serial number has to be right on each transaction, or the reports are wrong.

If you are weighing a move off Desktop, check how the new system handles costing, sites and lot tracking first. We cover the trade-offs in QuickBooks Desktop vs QuickBooks Online for manufacturers and distributors, and in our guide to the QuickBooks Desktop discontinuation.

How Logistify helps around Advanced Inventory

Logistify doesn't configure Advanced Inventory. Site Operations and picklists start from sales orders. The Sales Order Service enters orders from email, PDF, WhatsApp, SMS, voicemail or paper into QuickBooks Desktop as sales orders. A person reviews the exceptions. The Procurement Service follows up with suppliers on open purchase orders and captures confirmed dates and quantities.