Service Items are one type of Item and are maintained on the Lists->Item List menu selection.
See our article on all of the Item types supported by QuickBooks for more information.
Generally speaking, Items are designed to pre-fill invoicing and purchasing forms. Service Items normally include charges for labor or professional fees that your firm buys or sells. You should use Service Items for those charges for labor and professional fees that you plan to included on invoicing and purchasing forms.
Once you’ve created a Service Item, you can’t change the type to another type of Item, so use care when choosing the Item Type.
The New Item window appears below. How you record values in these fields depends on whether you’re creating a Service Item that you purchase or an Item that you sell. Some fields only appear if you’ve set a preference.
If you’re creating a Service Item used in purchases, record your vendor’s unit price as the Rate and choose an expense account for the Account. If you’re creating a Service Item you sell, record your typical selling price as the Rate and choose an income account for the Account.
Since you’ll have a chance to change the Description on invoicing and purchasing forms, you can either leave the Description blank, enter the most common Description, or create different Service Items for each unique description. QuickBooks stores the actual description recorded on each line of every invoicing and purchasing form, so the Description you enter when recording the Item is only an aid to filling out a form.
If the Service Item is used in assemblies or performed by a subcontractor or owner, click the checkbox indicating This service is used in assemblies or is performed by a subcontractor or partner. Doing so will allow you to record both the revenue and expense for each Item in separate accounts. Such Items can be used on both sales and purchase forms.
When you’ve recorded all relevant fields, click Next to save your changes and enter another Item or click Ok to save your changes and close the window.