How to Set Reorder Points in QuickBooks Desktop and See What to Buy

Before you start

• Inventory has to be on: Edit > Preferences > Items & Inventory > Company Preferences, then Inventory and purchase orders are active.
• Gather each item's average daily usage and its supplier's lead time. Three months of sales and purchase orders is a reasonable base.
• Set a Preferred Vendor on each item so you know who to order from.
• Assemblies you build have a Build Point (Min) instead of a reorder point.

Build points for assemblies are covered in How to set up a bill of materials and build assemblies.

Step 1: Work out the reorder point

Intuit's formula is average daily usage times average lead time in days, plus safety stock. Safety stock is the busiest day's usage times the longest lead time, minus average usage times average lead time.

Demand and lead times change. Intuit suggests checking the inputs at least once a quarter and allowing for busy and slow seasons.

Step 2: Enter the reorder point on the item

1. 1Go to Lists > Item List.
2. 2Double-click the inventory item.
3. 3Under Inventory Information, enter the number in Reorder Point.
4. 4Select OK.

For a new item, enter it when you create the item. See How to add inventory items in QuickBooks Desktop.

Step 3: Set reorder points by site (Enterprise with Advanced Inventory)

1. 1Go to Lists > Inventory Site List.
2. 2Open the Activities menu and select Set Reorder Points.
3. 3In Set reorder point for site, choose a site.
4. 4Enter a number in the Site Reorder Point column for each item.
5. 5Choose the next site in the same list and repeat.
6. 6Select OK when every site is done.

Site reorder points don't add up to the item's overall reorder point. Keep the Reorder Point on each item set as well. For site setup, see How to track inventory by site.

Step 4: Review what's running low

1. 1Go to Reports > Inventory > Inventory Stock Status by Item.
2. 2Compare each item's quantity with its reorder point.
3. 3Before you order, check what's already on purchase orders and on sales orders. QuickBooks tracks both for every inventory item.
4. 4With multiple sites, run Inventory Stock Status by Site to see stock at each location.
5. 5In Enterprise 2024 R7 and later, run Reports > Inventory > Inventory Turnover Report. Turnover days and the last sale date help you raise or lower a reorder point.

Next, turn the list into orders. See How to create purchase orders from the reorder report.

If the reminder doesn't show up

• Check that the item has a Reorder Point. QuickBooks can only remind you about items that have one.
• Items made with Duplicate Item start with Reorder Point at 0. Enter the number on each copy.
• With sites, a site can be low while the item's overall stock is fine. Set site reorder points too.
• Stock is only as current as the transactions in the file. Unentered receipts or sales throw the comparison off.

Where QuickBooks Desktop leaves the work to you

• Someone has to calculate each reorder point and revisit it as demand and lead times change.
• Someone decides how much to buy and creates the purchase orders.
• After a purchase order goes out, someone has to chase the supplier for a ship date.
• Customer orders still sitting in email or PDFs aren't on sales orders, so they don't show as demand.

We cover the chase in How to follow up on late supplier orders.

How Logistify helps after you decide what to buy

Logistify doesn't set reorder points or decide what to buy. Once you create purchase orders, the Procurement Service follows up with suppliers on the open ones. It captures confirmed dates and quantities and routes exceptions to your team. The Sales Order Service enters customer orders into QuickBooks Desktop as sales orders, so orders that arrive by email or PDF count as demand.