Setting Up and Managing Vendors in QuickBooks Online: A Guide for Inventory Success #

To keep your purchasing and inventory workflows running smoothly, it’s essential to have an accurate and well-maintained vendor list in QuickBooks Online. Whether you’re creating purchase orders (POs), entering bills, or tracking item costs, vendors are at the heart of your purchasing process.

In this article, we’ll walk through how to create vendor profiles, manage your vendor list, and use those records to support clean, accurate purchasing and inventory transactions in QuickBooks Online.

Why Vendor Management Matters #

A well-maintained vendor list helps you:

• Create accurate purchase orders and bills
  
• Maintain clean, searchable vendor records
  
• Track vendor-specific item pricing, terms, and contact info
  
• Generate reliable reports (e.g., unpaid bills, open POs)
  
• Improve workflows with inventory tools like register by ability business
  

Step 1: Creating a New Vendor in QuickBooks Online #

There are several ways to create a vendor in QuickBooks Online. Here’s one common method:

1. From the left navigation menu, go to Expenses > Vendors.
   
2. Click the New Vendor button in the upper-right corner.
   
3. Fill out the vendor’s details:
   
   • Name (as it appears on bills and POs)
     
   • Company name
     
   • Email and phone
     
   • Billing address
     
   • Payment terms (e.g., Net 15, Net 30)
     
   • Account number (if the vendor uses one)
     
   • Notes for internal use (e.g., preferred contact or delivery instructions)
   • Add attachments, ei:  contracts, policies
   • Additional information for Bill Pay ACH info and Business ID
     
4. Click Save.
   

Tip: Add as much detail as possible upfront. This ensures clean records and faster entry when creating transactions.

Step 2: Linking Vendors to Inventory Items #

To streamline purchasing:

• Go to Settings > Lists > Products and Services
  
• Edit an inventory item
  
• In the Purchasing Information section, assign a Preferred Vendor
  
• Enter default cost and description for POs
  

When you later create a PO or bill, QuickBooks will auto-fill this information based on the selected vendor and item.

Step 3: Managing the Vendor List #

Over time, your vendor list may grow. Here’s how to keep it clean and useful:

Editing a Vendor: #

• Go to Expenses > Vendors
  
• Click the vendor name to open their profile
  
• Click Edit to update contact info, terms, or notes
• Save
  

Making Vendors Inactive: #

If a vendor is no longer in use:

• Open their profile 
• Click the dropdown arrow next to the Edit button and choose Make inactive
  

This action will:

• Hide the vendor from dropdowns and transaction lists
  
• Keep all historical transactions intact for reporting and audit purposes
  

Important: Before making a vendor inactive, review and clear any open payables (unpaid bills). Inactivating a vendor with outstanding balances can lead to accounting discrepancies and incomplete reports.

To check for open payables: #

• Go to Reports > What you owe > Unpaid Bills
  
• Filter by vendor and resolve any outstanding bills before proceeding

Using Filters and Sorting:

• Use the Search bar or sort columns to quickly find a vendor
  
• Filter by open balance to identify who you owe
  

Vendor Reports: #

Use reports like:

• Vendor Contact List
  
• Unpaid Bills
  
• Open Purchase Orders
  

These help you manage outstanding payables and purchasing needs.

Step 4: Using Vendors in Purchase Orders and Bills #

Once your vendors are set up:

• Go to + New > Purchase Order
  
• Select the vendor; their default info fills in
  
• Add inventory items, quantities, and save the PO
  

When a bill arrives:

• Go to + New > Bill
  
• Select the vendor
  
• Link the existing PO if applicable
  
• Review and save
  

These actions:

• Track what you ordered
  
• Log what you received
  
• Update inventory levels and accounts payable
  

Best Practices for Vendor Management #

• Use consistent naming conventions (e.g., “ABC Supplies LLC” vs. “ABC Supplies”)
  
• Assign default payment terms to each vendor
  
• Regularly review inactive or duplicate vendors
  
• Ensure every item has a preferred vendor if you order it regularly
  
• Reconcile vendor bills with POs before approving payment
  

How This Supports Inventory Success #

By managing vendors effectively in QuickBooks Online, you:

• Reduce errors in purchasing
  
• Keep inventory quantities and costs accurate
  
• Create a smoother sync with tools like register by ability business
  
• Build a more efficient, traceable procurement workflow