USA How to handle non-inventory small parts use for repair services?

[shootify]

Hello, my name is Mike and I have a question. I will appreciate any help you guys can provide.

1- We are a computer and phone repair shop that buys a lot of small parts from different sources but mainly from eBay (Ribbon cables, hard drives, cards, laptop lcds, Hdmi port and so).

These parts are used by the shop to repair our customers' devices such as computers, phones , and so on. as you can see this parts are being resold to our customers in our final REPAIR SERVICE SALE RECEIPT. We don't keep this part in stock as we buy them as needed.

I am trying to handle this situation in my accounting software so I created an account called HardwareCOGS in the chart of accounts and categorized it as COGS. Then sub-accounts such as computerhwlcd, computerhwhdd, phonehwlcd, and so on, and then at the moment of the purchase I posted them accordingly. so for every purchase I make HardwareCOGS gets debits.

My question is how to properly handle these transactions in QuickBooks, knowing that we buy hundreds of these during a year and we don't keep them in stock

Questions:

1- How to properly handle this at the moment of selling the repair service that includes these parts.
1.1 should I create a sales receipt and break it into two lines such as Labor and parts HardwareCOGS:computerhwhdd so it credits this account or
1.2 should I create a single Line named Computer repair and post the total into that? if I do the last, the COGS account will never get credit and it will continue being debited for every purchase, so I think this is not advised.

Note: I don't want to create an inventory item for every item we buy as they are way too many different names, and as I said we don't keep them in stock at all.


Thanks all.

 

[mohamed Hussein]

Hi Mike,
Thank you for your detailed explanation! Here's the best way to handle your setup in QuickBooks:
your Problem Currently, your COGS account "HardwareCOGS" is only debited when you purchase parts but not credited during sales, creating an imbalance.
The Solution
Break your sales receipts or invoices into two lines:
1. Labor: Post the labor charge to an income account "Repair Service Income"
2. Parts: Post the cost of parts used to the same COGS account you used for the purchase "HardwareCOGS:computerhwlcd"

Debit: Bank (or Accounts Receivable, for invoices) (Customer Payment).
Credit: Repair Service Income (Labor Revenue).
Credit: HardwareCOGS (Offsetting the earlier debit from the purchase)

This approach balances the COGS account, avoids inventory tracking, and provides clear revenue reporting. Let me know if you need further guidance!