What occurs if you select "I purchase this product/service from a vendor" while setting up a product or service?

When you select "I purchase this product/service from a vendor" while setting up a product or service in QuickBooks Online, it enables specific functionalities that enhance your ability to manage inventory effectively. By indicating that you purchase the product or service, QuickBooks provides additional fields that allow you to track not only purchases made from your vendors but also sales made to your customers. This integration facilitates a comprehensive overview of your financials, enabling better inventory management, purchasing decisions, and profit analysis.

In contrast, if you were to choose a different option, such as only tracking sales without indicating purchases, you would miss out on the detailed insights associated with expenses and replenishing your inventory. The capability to track both aspects is crucial for businesses that rely on understanding their costs to evaluate profitability and maintain proper stock levels.