How to use QuickBooks Serial Number and Lot Number Tracking: The Limitations and Solution
Manufacturers get set up with QuickBooks to solve two of their problems: tracking finances and inventory. Unfortunately, those who track perishable inventory may find limitations with QuickBooks Lot and serial number tracking features.
That’s why we’ve looked into the limitations and solutions so you can use QuickBooks, without losing the ability to track inventory effectively.
In this article, we’re going to look into the limitations of using lot and serial tracking in QuickBooks, and how to upgrade your lot tracking capabilities with a Katana Smart Manufacturing integration.
What is a Serial Number and Lot Number?
A serial number is a unique identification number that is assigned to a manufactured product by a manufacturer. Products will also have an identifier – usually referred to as a SKU (stock keeping unit). A serial number is often used to track warranty and service issues after the sale of a product.
In comparison, a Lot tracking number is a number that is assigned to a group of products which have specific common properties. Lot tracking, also referred to as batch tracking, is the process of tracking materials and products, from start to the end of your supply chain, that will help you:
- Track expiration dates of products;
- Trace any defective items back to the batch it belonged to; and
- Enable product recalls.
If you handle perishable inventory, a lot tracking system is an essential tool for avoiding faulty products reaching the market.
But, the big question on modern manufacturer's lips, is there a QuickBooks serial number or lot number tracking feature?
Can You Track Serial Numbers in QuickBooks?
You can manually enter QuickBooks serial number tracking (or SKUs) by heading over to:
- The Sales tab and selecting Product and Services;
- Then click the Edit link on the product or service you wish to add a serial number too;
- Enter the serial number in the SKU field, then go ahead and select Save and close.
But, are inventory serial numbers available in QuickBooks online for automatic generation? Unfortunately no.
When you’re entering a serial number, a good rule of thumb is to use the batch number and creation date or take advantage of an SKU generator.
Setting up your serial numbers on items is going to help with lot tracking report in QuickBooks, so you can better understand:
- What are your best sellers;
- What’s in stock; and
- What’s still on order.
However, you can only add serial numbers manually and will (for the most part) only be used as references on invoices.
Can You Track Lot Numbers in QuickBooks?
QuickBooks lot tracking isn’t possible without integrating a batch inventory management system.
QuickBooks inventory management is built to support drop shippers, but not manufacturers with complex inventory types.
If you’re a manufacturer who carries a small amount of inventory with products that don’t require in-depth tracking, using QuickBooks Online is okay.
However, for manufacturers in certain industries, you’ll need a system that can help you track different inventory types and help you locate the location of batches.
It's possible to use spreadsheets alongside your QuickBooks for lot tracking, however inefficient spreadsheets are:
- Prone to human errors; and
- Difficult to maintain.
Automating your lot tracking in QuickBooks will allow you to monitor your inventory movements, and free up resources that you can use to help you scale your business.
The Limitations of Using QuickBooks Online for Inventory Management
QuickBooks is a fantastic tool for manufacturers looking for a system to help them manage their finances. However, if you need inventory tracking, including expiration date tracking to work with QuickBooks, you’ll find it doesn’t have all the features needed just yet.
Without 3rd party integrations, here are the limitations you can expect to find with QuickBooks lot tracking:
Inventory Tracking in QuickBooks
Inventory within QuickBooks is broken down into three types:
- Non-inventory; and
The features for QuickBooks Online inventory management is fine for drop shippers.
But, unfortunately, manufacturers need a system that can help them with raw material inventory management and track the conversion of those raw materials into finished goods.
It might be okay at first, but once your business starts to grow and your order volume increase, you’ll need to find a tool for automating your manufacturing that can help you centralize and integrate your:
- Order entry;
- Processing tools; and
- Contact management.
Inability to Track Unshipped Orders
The lack of advanced inventory management features needed for QuickBooks lot tracking as a manufacturer has already been mentioned, but the feature gaps also extend to sale order management.
That means without an alternative method of tracking or using a spreadsheet alongside your QuickBooks Online, you’re going to struggle to understand if products have been shipped to customers or if they’re still within your warehouse.
Using a 3rd party integration for lot tracking in QuickBooks is going to help you easily locate your products. Other companies have tried to use QuickBooks online for tracking their open orders, but the system isn’t a robust solution for managing your supply chain.
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No Multiple Warehousing Option
QuickBooks Online lot tracking only supports one warehouse location and is unable to track inventory across different sites.
There is a workaround to this, you can monitor inventory at different locations by “splitting” items and assigning them to the locations you want them stored.
However, the issue is that it’s a complicated workaround to maintain, and becomes unmanageable when your business starts to expand.
Plus, having a system that’s difficult to understand will only serve to become a hindrance in the event you need to perform a product recall.
For tracking inventory at multiple warehouses, you’re going to need a tool that can integrate QuickBooks Online lot tracking for multi-location inventory management.
Doesn’t Support Manufacturing
Manufacturing industries require different features when it comes to inventory management, and their needs are so diverse, there are apps on the market built specifically for one area.
Some apps support different types of industries. Unfortunately, lot tracking in QuickBooks isn’t going to have the features you need, unless you find an app that integrates with QuickBooks.
Manufacturers looking for lot tracking in QuickBooks are going to struggle without finding a 3rd party integration that can give you those needed features for manufacturing, such as:
- A module for saving your bill of materials (BOMs);
- Production planning and scheduling functions; and
- Ability to track the conversion of materials into finished products.
The lack of advanced features makes QuickBooks Online difficult to use for manufacturers in general, but for those industries that handle perishable goods, they need tools for:
- Raw materials inventory management;
- Lot tracking; and
- Product recall functionalities.
QuickBooks Online is Designed for Accounting
The primary function of QuickBooks Online is to give its users a general accounting software and is designed to cater to as many business types as possible.
QuickBooks lot tracking is possible, but only with the use of production and manufacturing management tools.
That’s why QuickBooks has the Appstore, so you can use their software for your bookkeeping needs, and integrate any apps to give you the extra functions that you require.
Get QuickBooks Online Lot Tracking with Katana
Katana Smart Manufacturing Software is a 3rd party lot tracking solution with integration functions to give you the tools for QuickBooks Online lot tracking.
Katana bridges the gap between your sales, production, and accounting to give you a smooth workflow, centralized to one, easy to understand, dashboard.
When using Katana, you can take advantage of:
QuickBooks Online Lot Tracking
Katana has a product traceability system, which allows you to save and track historical information on products, as well as trace them to their most recent location.
Automated Inventory Management
Upgrade your QuickBooks inventory management with automated tracking of your raw materials and finished goods inventory.
Production Planning and Scheduling
Katana automatically schedules and allocates material to production. However, our nifty drag-and-drop system allows you to reprioritize your workflow.
How to Connect QuickBooks to Katana
Katana offers a 14-day free trial, so you can sign-up, integrate QuickBooks, and start testing out the software within a few minutes.
And to get set-up is easy:
1. Firstly, head over to Katana sign-up for the free trial.
2. Once set-up, head over to the Settings screen, and connect your QuickBooks account to Katana by clicking the “Connect” button.
3. Finally, configure how you wish Katana to interact with your QuickBooks account, including:
— Defining the status of invoices sent from Katana to QuickBooks;
— Defining the status of bills sent from Katana to QuickBooks;
— Mapping your tax rates; and
— Importing customer and supplier details from QuickBooks to Katana.
4. Select “Done” and that’s it! You’ve taken the first step toward automated manufacturing and can now start using QuickBooks Online lot tracking.
Be sure to check out the video below for a guide on how to integrate Katana x QuickBooks:
Does QuickBooks Online plus inventory track serial numbers? No, but can with the help of lot tracking apps.
But, very quickly, is QuickBooks Online a good fit for manufacturers?
It’s good for manufacturers who:
- Make products with single-level assemblies;
- Distribute goods with a long shelf life; and
- Don’t need QuickBooks Online lot tracking for stocked items or perform value-added services.
It’s bad for manufacturers who:
- Make products with multi-level BOMs and need lot tracking capabilities;
- Work within food production and cosmetic manufacturing;
- Work in an industry that needs to track perishable goods (including electronics); and
- Perform value-added services that require them to monitor inventory.
QuickBooks Online is a fantastic tool for managing your finances. However, for scaling manufacturers, the absence of features for QuickBooks Online lot tracking and production means you’re going to need to develop another system to help you with this aspect of your business.
But developing your own system is going to cost you time and money.
Katana allows you to bridge the gap with its batch manufacturing features, by easily integrating and synchronizing with your QuickBooks account.
Why not try it out for yourself? Katana has a 14-day free trial, so you can integrate your accounts and start using QuickBooks Online lot tracking today.
We hope you found this article useful. If you have any questions please feel free to get in touch in the comments below or over on our social media.
And until next time, happy manufacturing.