If selling goods or products is central to your business’s operations, you want to make the invoicing process as simple as possible. And while your products will generally have consistent pricing, you might want to offer a sale or discount to entice your customers to buy more. In these instances, you don’t want to be in charge of manually discounting prices, especially if your sales volume is significant.
Luckily, if you use QuickBooks Online as your business accounting software of choice, you can make these price adjustments automatic. Creating price rules, also known as QuickBooks Online price levels, allows you to automatically discount (or increase) the price of specific products. QuickBooks price levels can be created to run for a set amount of time, say, if you’re having a sale for a specific holiday; and you also have the option to extend the new price to all of your customers, or only certain customer types.
In this QuickBooks price levels guide, we’ll offer step-by-step instructions on how to turn on QuickBooks Online price levels, plus how to create a price level.
How to Turn on QuickBooks Price Levels
Before we begin, it’s important to note that the QuickBooks price levels function is only available in the QuickBooks Online Plus and Advanced plans. It is not offered in QuickBooks Essentials, QuickBooks Simple Start, or QuickBooks Self-Employed.
If you are working with QuickBooks Online Plus or Advanced, then you have the option to create price levels. To do so, you will first need to turn QuickBooks price levels on. Here’s how to do so:
- Navigate to the gear icon on the toolbar
- Select “Account and Settings”
- On the left hand side, navigate to the “Sales” tab
- Under the “Products and services” section, check the box next to “Turn on price rules”
- Save and close out
Here is an example of the screen you will see to turn on QuickBooks price levels:
While it says “Beta” next to price rules, you don’t need to be concerned—the price levels function works great as is. It is worth noting, though, that price rules, or price levels, do not impact reporting. In other words, you can’t run a report specifically on sales affected by QuickBooks price levels.
Once you have successfully turned on the QuickBooks price levels setting, you’re ready to create a price rule.
How to Create a Price Rule With QuickBooks Price Levels
Now that your QuickBooks price levels is turned on, there are a few different ways to create a price rule. Here’s one option:
- Navigate to the gear icon on the toolbar
- Select “Lists,” then “All Lists”
- Select “Price Rules,” then “New price rule”
You can also create a price rule by navigating to the Products and Services list and then selecting the drop-down arrow next to the “More” tab. Alternatively, QuickBooks price levels can also be accessed from the “edit item record” function.
From here, you can name your price rule and select a start and end date (if your promotion is only for a limited time).
Additionally, you have the option to select the customers you would like to apply your new price level to. You can select all customers, if you want your new price to be available to everyone; but if you only want specific types of customers to access your new price level, you can specify that.
If you assign your products and services to categories in the items list, you will also be able to filter the price level by product category to more easily apply price levels to the applicable products.
You can set your sale price or rate by either a percentage (i.e. 10%), a fixed amount (say, $25 off), or you can set a custom price per item.
You also have the option to round the amount to the nearest increment (i.e. $0.10, $0.50), or leave it as is (“no rounding”).
Here is an example of a sales receipt for a product with an active price level. Note the default sales rate of $100 and the $75 rate due to the price rule (called “Beyond the Basics” in this instance) being in effect.
It’s important to note that this is the visibility you’ll have as the one sending the invoice. The customer will only see the price of $75 on their invoice, and any report on the sale will show $75, not $100. As we mentioned, there is no reporting specific to QuickBooks price levels, or price rules, by customer at this time.
Creating a Customer Type for QuickBooks Price Levels
As we mentioned above, you can select specific customer types who will be able to access your new price rules if you do not want all of your customers to receive the discount or sale price for your products.
Even if you never plan to use QuickBooks price levels, it may be worth turning it on just for the ability to create customer types. This is because you will then be able to run a “sales by customer type” report—aka segmenting out your customer list—which can be a very beneficial insight for your business.
To create a customer type:
- Select “Sales” from the left-hand menu
- Select “Customers”
- Select the “Customer types” button next to the “New customer” button
- Choose “New customer type”
- Label your new customer type as you wish
Once this customer type has been created, you can then edit each of your existing customers and assign them to their respective customer type.
You will find the “Customer type” field in the “Additional Info” tab inside the “Customer Info” window.
If you don’t want to edit and assign customer types to each of your customers one by one, you can also assign customers to specific types in batch.
Once your customers are assigned to different customer types, you can designate your QuickBooks price levels to only be applied to certain customer types. This way, the customers who you want to receive the altered price will automatically be eligible, while those not in the specified customer type will not be aware of any price changes.
As we mentioned, an added bonus of creating customer types for your QuickBooks price levels is that you can then run reports specific to customer types. Simply select the “Sales by Customer Type Detail” under the “Sales and customers” section.
QuickBooks Price Levels: The Bottom Line
Managing your small business finances is a complicated operation, but QuickBooks Online can help make the process easier. If you often adjust the rates for your products or services, QuickBooks price levels is a useful tool to automate this process and help ensure happy customers and sales.
If you still have questions about how to turn on or create QuickBooks price levels, this video can help. There is also a vast QuickBooks community that can help answer your QuickBooks Online price levels questions, as well as any other QuickBooks questions you may have.
Stacy Kildal is a contributing writer for Fundera.
Stacy Kildal is owner/operator of Kildal Services LLC—an accounting and technology consulting company that specializes in all things QuickBooks. From 2012 to 2017, Stacy has been named one of CPA Practice Advisor’s Most Powerful Women In Accounting.
Stacy is one of the three hosts for the QB Show and has also been featured frequently on Intuit’s Accountant Blog, Community “Ask the Expert” forums, at various Intuit Academy To Go podcasts, as well as hosting a number of Intuit Small Business Online Town Hall sessions.
She is a big fan of working mobile and has been recognized by Intuit as being an expert on QuickBooks Online, having written Intuit’s original courses for the U.S., Singapore and Canadian versions.