How to Use Item Categories in QuickBooks Desktop Enterprise

Before you start

• Categories are a QuickBooks Desktop Enterprise feature. Intuit lists inventory categories among the features new in QuickBooks Desktop 2023.
• Update to the latest Enterprise release first. Intuit says it improved the feature, and that categories are turned off in Release 1 (R1).
• Plan the tree before you build it. Categories go up to 4 levels deep, and Enterprise holds up to 10,000 of them.
• Price rules by category need Advanced Pricing. Intuit's article says it comes with the Enterprise Platinum subscription in the US.
• Turning on Advanced Pricing converts your price levels into price rules. Plan for that before you enable it.

Step 1: Create your categories

1. 1Go to Lists > Category List.
2. 2Select Manage Categories, then Add new category.
3. 3Enter the category name. For a subcategory, select Is a subcategory of and choose the parent.
4. 4Add a description if you want one.
5. 5Select Save, then OK.

To change a category later, right-click it in the Category List and select Edit category. You can change its name, its parent or its description.

Step 2: Put items in categories

One item at a time

1. 1Go to Lists > Item List and select the item.
2. 2Select Item, then Edit Item.
3. 3Select Category, then choose a category or Add New.
4. 4Select Save, then OK.

Many items at once

1. 1In the Category List, select the category the items sit in now.
2. 2Check each item you want to move.
3. 3Select Batch Actions, then Move to a different category.
4. 4Choose the new category or subcategory and select Save.
5. 5Confirm the move with OK.

Step 3: Load categories and items in bulk

1. 1Go to Lists > Add/Edit Multiple List Entries. You can also open it from Category List > Manage Categories > Add/edit multiple categories and items.
2. 2In List, choose Service Items, Inventory Parts, Non-Inventory Parts or Inventory Assemblies.
3. 3Type categories in the category column, or paste rows from Excel with Ctrl+C and Ctrl+V.
4. 4Use Copy Down to repeat one value in the other rows. It overwrites what's already there.
5. 5Select Save Changes.

For the rest of that window, and for the Excel import, see How to import items from Excel into QuickBooks Desktop.

Step 4: Use categories on transactions and reports

• On a transaction, open Find & Select Items, select Filter items by category and pick the category. The list shrinks to that category's items.
• Inventory Valuation Summary, Inventory Stock Status by Item and Sales by Item Summary can show items under their categories. Select Hide Category to switch back to items only.
• Inventory Valuation Summary, Inventory Turnover by Item and the Physical Inventory Worksheet can show a category column in a flat list. Turn it on in Customize Report.
• Item Price List and Item Listing show each item with its category and subcategory.
• For a custom report, go to Reports > Custom Reports > Transaction Detail. On the Display tab, set Total by to Category: Item Detail.
• To narrow a report, select Customize Report, open the Filters tab and filter by Category.

For what each inventory report answers, see Which inventory reports to run in QuickBooks Desktop.

Step 5: Set a price rule for a category

1. 1Go to Edit > Preferences, select Sales & Customers, then Company Preferences.
2. 2Select Enable Advanced Pricing, choose how to round prices and select OK.
3. 3Go to Lists > Price Rule List.
4. 4Select Price Rule, then New, and name the rule.
5. 5Select the + button, choose Items, then Category, and pick the category. Don't use Uncategorized.
6. 6Set the date range and the price change, then select OK.

The rule applies to every item in that category. To see it on an invoice, date the invoice inside the rule's range and add an item from the category. Select the tooltip to open Applied Price Rules, which lists the rule.

Deleting categories and other limits

• Before you delete a category, move the items out of it and its subcategories. Then right-click it, select Delete category and confirm with Yes, delete.
• In the Category List, the Item menu at the bottom has Customize columns, to reorder, add or remove columns.
• Pro and Premier don't have categories. Intuit's list limits mark categories N/A for those editions.
• If a billing rate and a price rule both apply to an item, QuickBooks uses the billing rate.
• Price rules don't apply to estimates that use the markup column, or to invoices created from them.
• Enterprise 2023 R1 and R3 can crash when you search the item list in Categories. Intuit's categories article has a workaround.

Where QuickBooks Desktop leaves the work to you

• Someone has to design the category tree and stop it from sprawling.
• Every item has to be assigned, including each new item as it's added.
• Reports and price rules are only as good as those assignments. A wrong category means a wrong price or a misleading report.
• Moving from Pro or Premier means moving to Enterprise before categories are available.