QuickBooks Inventory Limitations

February 7, 2025 by Henry Wythe

QuickBooks Enterprise Inventory Limitations

QuickBooks Enterprise offers robust inventory management capabilities, but there are several key limitations that businesses should consider. Below is a detailed overview of what QuickBooks Enterprise cannot do with inventory management

Serial Number and Barcode Limitations

Cannot track both serial numbers and lot numbers simultaneously.
Cannot prevent errors in serial number selection or enforce serial number entry in transactions.
Cannot handle an unlimited number of serial numbers per line item due to the 4,096-character limit per transaction line.
Cannot print serial or barcode labels for serial numbers.
Cannot scan QR codes containing multiple lines of information.
Cannot directly scan serial numbers or lot numbers into transactions without first selecting the item.
Cannot generate or assign random serial numbers.
Cannot track warranty dates based on serial numbers.

Barcode Scanning Restrictions

Limited USB barcode scanning functions:
Cannot scan barcodes for inventory adjustments, building assemblies, or creating new inventory items.
Cannot scan barcodes to convert sales orders into invoices.
Cannot use barcodes to pull transactions or print them.
Cannot recognize multiple units of measure from different barcodes for the same product (e.g., no functionality for scanning a single unit vs. a box of 12).
Cannot use “smart” barcode scanners to retrieve product information instantly.

Inventory Levels and Forecasting

Cannot produce inventory forecasting or turnover ratio reports.
Cannot provide proactive notifications when inventory levels are low.
Cannot create shortage or materials-required reports based on BOMs and open sales orders.
Cannot track inventory scrap during production without manually entering adjustments.
Cannot calculate individual FIFO layers for each lot or manage Specific Cost Identification for serialized products.

Reporting and Analysis Gaps

Cannot produce a consolidated report of all open sales orders containing assemblies with their respective BOM details.
Cannot account for scrap or yield loss during production in a streamlined way; only manual adjustments are possible.
Cannot track volume discounts on purchases or reflect those in reports.
Cannot create a report to track expense allocation for landed costs, making it difficult to associate specific costs with related bills directly.

Inventory Flexibility

Cannot handle inventory matrixes (style grids). Each SKU and price variation must be a separate item.
Cannot assign alternative products to suggest substitutes when inventory is short.
Cannot track SKUs effectively without custom fields, which are not easily accessible.
Cannot create a “non-sellable” site location (e.g., in-transit inventory) to restrict inventory that should not be used for sales.

Other Usability Limitations

Cannot use the wireless warehouse app to perform inventory adjustments on-the-fly. Adjustments must be part of formal, pre-generated cycle counts.
Cannot create inventory assemblies that accurately link associated costs with bills of materials.

Pricing and Cost Calculations

Cannot set a default markup or margin for sales price calculations across all items.
Does not allow automatic or dynamic sales price recalculations based on changes in the cost of Bill of Materials (BOM) components.
Cannot calculate labor or overhead costs based on routing steps or production plans; manual calculations are required.
Price rules and volume discounts cannot be selectively applied. Instead, both rules are automatically combined when applicable, which may be confusing to the user. There’s no intuitive indication when this occurs, potentially leading to pricing errors.
Cannot warn users when selling below a target margin or profit.
Cannot restrict users from selling below cost or outside a specified price range.
Cannot integrate a “list price” field into pricing rules—only sales price or cost can drive pricing calculations.
Differentiate pricing for an item based on different U/M (e.g., $10 per unit vs. $90 per dozen). While advanced pricing enables quantity discounts, it does not allow finer distinctions tied explicitly to U/M.
Restrict sales or purchases to specified multiples based on U/M. Users can sell or purchase with any associated U/M, lacking restrictions for “dozen-only” transactions, for example.

Manufacturing and Assembly Management

Cannot manage varied manufacturing process statuses; assembly statuses are limited to “built” or “not built.”
Does not support multilevel BOMs but can handle nested assemblies by creating separate builds for subassemblies.
Cannot schedule, plan, or track the status of manufacturing processes.
Cannot perform assembly builds if components are out of stock; it creates a pending build instead, delaying the process.
Does not calculate raw materials needed for future manufacturing based on sales orders or estimates.
Cannot allocate inventory from a build to specific sales orders or link a group of sales orders to a specific assembly.
Lacks functionality to estimate or allocate labor and overhead costs based on historical data.
Cannot build assemblies directly from sales orders.
No report exclusively for assembly components or subassemblies required based on open sales orders.
Cannot create “Work Orders” or “Manufacture Orders.” The “Pending Build” feature is the closest workaround but lacks proper integration with multiple bills of materials (BOMs) tied to a single sales order.
Cannot create assemblies based on open sales orders.
The system cannot automatically allocate or capitalize overhead expenses (labor, overhead costs, etc.) to assemblies

Purchase Order Management

Cannot automatically generate purchase orders (POs) based on historical sales or purchases for inventory forecasting, although it can create POs to replenish inventory falling below the minimum reorder point.
Cannot track purchase orders per inventory site, making it difficult to project incoming inventory for specific locations.
Cannot handle minimum order quantities or required multiples from vendors.
Cannot automate backorder fulfillment once items are received; manual processes are required.
Cannot fill in item costs, lead times, or vendor part numbers automatically on POs based on data stored in the Alternate Vendors feature, which limits its usefulness.
Does not allow selective printing of certain items from a sales order—e.g., printable exclusions for backorders, in-stock items, or specific services/products.
Cannot bulk update vendor item costs based on a percentage change without uploading a vendor price list from an external file.
Cannot manage prepayments to vendors on purchase orders without manual workarounds, such as using prepaid asset accounts.
Cannot set default selling or purchasing site locations per customer or item, though QuickBooks does support BIN locations at the site level.
Complexities arise when receiving items into multiple lot numbers for a single line item in a purchase order (PO). The system requires users to manually split the original PO into multiple lines based on the quantities tied to each lot number. Only then can the user successfully assign lot numbers within item receipts or bills.
Cannot functionally track lead time to estimate product arrival dates, although lead time can be stored in the Preferred/Alternate Vendor table.
Cannot suggest a vendor based on price or lead time, even if these details are recorded using the Alternate Vendors feature.

Sales and Order Fulfillment

Cannot prevent overselling inventory items allocated to a sales order or allow partial sales order invoicing tied to fulfillment data.
Cannot mark a sales order as partially shipped in the fulfillment workflow (only partially packed), rendering the workflow unusable for companies shipping orders in multiple transactions.
Does not prioritize or commit inventory for backordered sales orders based on criteria like customer type or order age.
Cannot automatically reserve or allocate purchase order inventory for specific sales orders, making it challenging to manage tied orders.
Does not support status tracking for canceled items or orders.

Reporting and Inventory Tracking

Cannot produce detailed reports on BOM components required for future builds, based on open sales orders.
Lacks functionality for reports on profit margin per invoice, even though cost of goods data exists at the transaction level.
Cannot track non-inventory or service items tied to specific site locations in inventory reports.
Cannot export inventory data as a CSV with hierarchical item paths (“ParentItem:Subitem”) for a specific date—exports include all dates.

Additional Inventory Limitations

Cannot track component costs below $0.01.
Units are not rounded appropriately in automated reordering; e.g., QuickBooks will suggest ordering fractional units instead of rounding up.
Cannot isolate specific bin locations in inventory adjustments or cycle counts; adjustments and counts only apply at the site level.
Cannot print item labels with barcodes directly from transactions.
Does not track expiration dates or restrict sales by lot number/expiration; users must manually ensure compliance.
Does not auto-fill lot numbers based on sequential or received date values.
Cannot import starting inventory balances with detailed data like multiple inventory sites, bin locations, or lot numbers without using additional software.

Limitations of the System

Performance with Large Files

This system cannot handle very large company files effectively. Files exceeding 2GB in size, 20,000+ inventory items, or over 1,000,000 transaction lines are prone to instability. Such limitations may impact businesses managing complex or extensive data, necessitating the exploration of more robust alternatives.

Inventory Reporting Constraints

The platform exhibits notable limitations in inventory reporting capabilities, including but not limited to the following issues:

Lot Number Reporting Across Multiple Lines: It cannot generate matrix-style reports displaying inventory on hand by lot number across multiple lot numbers on the same line. However, basic “Quantity on Hand” reports by item and lot number are available.
Site/Bin Location Reporting: Reports cannot aggregate inventory data by lot number across various site/bin locations on the same line. Only item-specific “Quantity on Hand” reports are supported.

Unit of Measure (U/M) and Pricing Limitations

Default Unit of Measure (U/M): Only one default U/M can be set across the system for all situations. Exceptions exist for purchases, sales, and shipping, which function effectively in this regard. However, the system lacks flexibility in accommodating multiple U/M defaults for specific customers or site locations.
Reports by U/M: Inventory reports cannot display valuations or quantities in units of measure other than the Base (default) U/M. For example, an inventory valuation report cannot convert values to “Selling U/M” or “Shipping U/M.”
Pricing Rules and Restrictions: The system cannot:

Features Not Supported by the Mobile Scanner and App for QuickBooks

When utilizing the mobile barcode scanner or app within QuickBooks Enterprise, there are several limitations to be aware of. For optimal workflow, it’s important to understand the specific actions that cannot be performed directly from the mobile device or scanner. Below is a detailed breakdown of features not supported:

Inventory Management

The scanner cannot initiate a random inventory count or adjustments without first setting up a Cycle Count in QuickBooks Desktop. Note that Cycle Counts are limited to a maximum of 100 items at a time.
Item receipts must be initiated within QuickBooks Desktop; they cannot be started from the mobile device.
The mobile app cannot initiate an inventory transfer or adjust site locations (or Bin Locations). Even when initiated via QuickBooks Desktop, these actions cannot be completed using the scanner.
Inventory “check-in” or “check-out” for items temporarily taken to a job site or truck is not supported.
Lot numbers cannot be selected or tracked via the mobile device when receiving, picking, or packing. These entries must be completed manually within QuickBooks Desktop.
The scanner cannot alert users if an incorrect lot or serial number is picked (e.g., an expired lot or a serial number not in stock). Warnings will only appear within the QuickBooks software itself.
The tool cannot assist with assembling inventory items or picking specific ingredients for inventory assemblies.

Sales Orders and Transactions

The scanner cannot create new sales orders, invoices, or standalone transactions such as sales receipts, purchase orders, or adjustments. All transactions must be initiated from QuickBooks Desktop.
Editing sales orders (e.g., adding items, replacements, or notes) directly on the scanner or app is not possible.
The scanner cannot convert a sales order to an invoice or make changes to invoices directly.
There is no ability to skip workflow steps (e.g., going directly from “Pick” to “Packed/Shipped”). Each step must be executed as designated in QuickBooks, unless expedited actions were set up initially.

Picking and Packing

Changes or corrections to a “Pick” or “Pack” action cannot be undone through the scanner or the app.
Actions such as delegating or transferring “Pick” or “Received” tasks to another warehouse user cannot be performed within the app itself.
Proactive notifications for new orders requiring picking, packing, or shipping are not supported. Users must manually monitor the app for incoming tasks.

System Interactions and Notifications

The app does not support scanning alternate barcodes or unit-of-measure barcodes (e.g., barcodes representing multiples of individual items within a package). This functionality is also unavailable for USB-based scanning within QuickBooks.
Users cannot use the mobile scanner to add or edit item data (e.g., inputting a barcode number for a newly received item). These updates must be performed using a USB scanner directly in the QuickBooks interface.
The app does not provide proactive alerts or mobile notifications for new orders. Users must regularly check the app to stay updated on system activity.

FDA Regulation of Dietary Supplements

January 11, 2024May 18, 2022 by Hunter Wythe

How does the FDA regulate dietary supplements?

The Food and Drug Administration (FDA) has regulated dietary supplements since at least 1938. At the time they were regulated like any other food, however. In the 1980’s they became defined as “food additives,” leading to a lot of confusion and inconsistent regulatory standards. The Dietary Supplement Health and Education Act (DSHEA) of 1994 set the foundation for the way dietary supplements are categorized, sold and regulated today.

While there are some critics of the FDA’s regulation of dietary supplements, they do their best to keep the public safe. Important updates were implemented in the 2011 Food Safety Modernization Act (FSMA). The scope and form of regulation can be divided into three areas: formulation, manufacturing processes, and consumer safety. Each area works in concert to create products that are researched, reliably potent, and safe.

Formulation of Dietary Supplements

The definition of a dietary supplement, as established in DSHEA, encompasses “vitamins, minerals, herbals and other botanicals, as well as amino acids and other dietary substances used to supplement the diet, and any concentrate, metabolite, constituent or extract of those items.” It is the manufacturer’s responsibility to be able to conduct testing for every ingredient they use. That testing is used to prove that their product is exactly what they say it is and is as potent as they claim. Those tests may be for final product or as an ingredient sold to another manufacturer.

In instances of business to business sales, it is also the obligation of the buyer to validate the claims of the seller. When an audit or product incident occurs, the FDA will validate not only the results of the tests but that the tests are appropriate and accurate.

If a product is being sold to a consumer the manufacturer must be able to prove that every batch of the product meets the claims made on the product label. Whatever company has their name on the label is responsible for the claims made on the label; whether it is the manufacturer or an Own Label Distributor (OLD). This is done by keeping records of their ingredient lab results and what batches those ingredients went into.

Manufacturing Process

The FDA further regulates dietary supplements by monitoring a company’s manufacturing process though prescribed Good Manufacturing Practices (GMP’s). Current GMP’s (cGMP) say that any product “has been prepared, packed or held under conditions that do not meet current good manufacturing practice regulations” to be compromised and thereby unfit for sale. The FDA can respond with warning letters and possible prosecution. Consumers are increasingly aware of what they are putting in their bodies.

Third party certification programs like the Safe Quality Food (SQF) Institute are becoming a standard bearer recognizable by consumers. Their certifications typically go above and beyond what is required by the FDA but also gives companies a competitive advantage. Buyers and retailers may also require certain certifications to be shelved in their stores.

Consumer Safety

Since the enactment of DSHEA in 1994 the FDA has been able to request voluntary recalls from manufacturers if it determined that there was “a serious or unreasonable risk of injury or illness.” The Nonprescription Drug and Dietary Supplement Consumer Protection Act of 2006 requires manufacturers to alert the FDA of serious adverse events that are reported. Manufacturers are also required to maintain a record for six years of any and all complaints and events reported to the company.

The Food Safety Modernization Act (FSMA) put the sharpest arrow in the quiver of the FDA in terms of authority. On top of their audits of GMP’s the FDA may issue a mandatory recall if it determines that a product may cause serious adverse health effects.

Today’s FDA has a powerful arsenal to ensure the products dietary supplement manufacturers produce are safe and effective. Between them and the third party certificates available consumers can be assured that the products they purchase will be as advertised and safe to consume.

6 Manufacturing and Food Safety Software Must-Haves

August 30, 2022May 11, 2022 by Hunter Wythe

Now more than ever food and beverage manufacturers are up against greater challenges. Antiquated pen-and-paper tracking is still surprisingly prevalent in even large and mid-size companies. These systems can open the door to issues when it comes to quality and food safety requirements.

Alternatively, the right food safety software can help balance business profitability and FDA regulatory compliance guidelines. These are six key points to consider when looking at food and beverage manufacturing software.

1. Traceability Software for Food Manufacturing

The most essential assurance that your final product is safe and salable is being able to accurately track qualified ingredients and products through every stage of the manufacturing process. Being able to track individual lots, bins, and ingredients ensures that your manufacturing and quality teams can be proactive in identifying and addressing issues at any point in the production cycle.

That said, sometimes problems arise. Good traceability software for food manufacturing will tremendously speed up the process in the event of a recall or inspection. The integration of traceability software and your FDA regulatory compliance and food safety software will provide a record of where your components came from and what products they went into.

2. Quality Management

Quality is arguably the biggest part of the manufacturing process. After all, this is the product you’re selling. You can increase profitability and minimize the risk of recalls with an integrated quality management or ERP system as part of your business flow. With an integrated quality system you can hold an upper hand against the competition, rather than being reactive.

Food safety and FDA regulatory compliance software isn’t just about following the rules. The right ERP platform will ensure your production meets your defined standards — consequently increasing profitability!

3. Inventory Maintenance and Planning

Especially when dealing with perishable goods, managing your inventory is key to maximizing production capacity. Your food and beverage manufacturing software should be able to help you manage “use by” dates and orchestrate your materials management planning and procurement.

Detailed work-in-process coordination and ingredient requirement anticipation are essential to maximizing your production cycles, labor demands, and ultimate profitability.

4. Food Safety Plans and CAPA’s

Whatever product you’re manufacturing is going to have some unique production process. Your food safety software should help you manage the Hazard Analysis and Critical Control Points (HACCP), process controls, and analysis of the goods you are producing.

In the event of an audit or recall, you may have to create Corrective and Preventive Action (CAPA) plans. Managing quality and safety manually can leave you with the grueling process of trudging through binder after binder for relevant information.

Conversely, an integrated food safety software system with FDA regulatory compliance in mind makes your quality management team precise and efficient in the generation of CAPA’s and food safety plans.

5. Batch Recipes and Ingredient Details

A food and beverage manufacturing software package should be able to track all relevant information about the ingredients in your final product. Your system needs to track things like technical properties, lab results, costing information, allergens, product claims, and history.

Furthermore, documentation at every step ensures your product is exactly what you claim it is on the label.

6. The Right Solution at the Right Time

The decision to move forward with a software solution is not a decision to be taken lightly. Finding the one that suits your business size and the industry niche is critical. You’re trying to make your manufacturing process smoother and grow your business.

Full-scale Enterprise Resource Planning (ERP) software can be a costly and complex solution. Fortunately, there are plenty of excellent and capable software solutions.

Crystal System’s Clarity Plugins provide an advanced ERP System for Natural Products that extends the capabilities of popular software like QuickBooks to help you streamline your manufacturing process without having to invest in a costly and complex ERP System.

HACCP In Your Manufacturing Process

June 7, 2022August 10, 2021 by Hunter Wythe

With the increasingly global nature of the food and supplement industries, quality assurance regulations have become incredibly complex. Despite this evolution, a surprising number of companies still rely on a paper-based system for their Hazard Analysis and Critical Control Points (HACCP) plan. HACCP is an internationally recognized system of proactivity in the management of a company’s quality and safety obligations.

The FDA requires manufacturers to have a HACCP plan in place.

How Does HACCP Fit In and Why Is It Important?

There are a growing number of businesses in the food and supplement industries adopting more modern solutions to a HACCP plan. Finding a business size-appropriate software solution is the direction these forward-thinking companies are going.

A software solution, typically a full-scale Enterprise Resource Planning (ERP) system, can streamline food and supplement manufacturers’ response to issues when they arise. A good ERP solution can help maximize the manufacturing processes too.

The Centers for Disease Control and Prevention (CDC) suggests that the rates of food-borne illness have remained about the same annually in the past decade. That said, recalls have been on a rise, especially since the Food Safety Modernization Act (FSMA). The Food and Drug Administration (FDA) has more authority to monitor and regulate food and supplement manufacturers in an effort to keep the public safe.

The Public Interest Research Group (PIRG) says overall, food recalls have increased 10% from 2013 to 2018. However, these numbers shouldn’t frighten food and supplement manufacturers. PIRG goes on to say that this is likely a result of more advanced identification and detection techniques. The numbers are also likely higher due to companies executing more voluntary recalls. Recalls are more easily executed, or ideally avoided, with the use of well implemented HACCP plans.

Compliance doesn’t have to be hard

An ERP system, big or small, which incorporates quality management, gives a business a leg up on the competition. Companies looking to enlist the help of more advanced software can catch problems as they arise — such as preventing the event of a costly recall.

More importantly, ERP systems aid in the creation of a higher quality product. A solid ERP system helps with developing plans for HACCP. When an issue arises, the system aids in the development of corrective and preventative actions (CAPA)’s too.

A powerful ERP for food and supplement manufacturers doesn’t have to be complex or costly. Crystal System’s Clarity Plugins provide an advanced ERP system using QuickBooks. Contact us today to learn more or to schedule a demo.

Essential Legal Checklist for Natural Product & Functional Food Companies

April 5, 2024November 13, 2018 by kendeyl

Are you wondering how to legally protect your natural product or food and beverage company? The legal system can seem overwhelming when creating a new product or launching a brand. Legal obligations and fees vary depending on business structure and location. Consult a business attorney and a regulatory compliance expert prior to forming your operations structure to determine which requirements apply. Use our natural product legal decision checklist to make informed choices and find resources.

1. Choose a business structure

This decision needs to be made first. Your business structure impacts your business registration, tax obligations and personal asset liability. So choose carefully. Future structure changes may be limited by your location and cause tax penalties and other negative consequences.

Also choose a structure that offers the benefits and legal protections that are right for your business. There are nine business structure choices with various considerations . The most popular for new businesses are: sole proprietorship, partnership and Limited Liability Corporation (LLC).

• Sole Proprietorship

Set up the most simple business structure if you’re a company of one (for now). One person assumes liability for company profits and debts.

• Partnership

Choose this for businesses owned by two or more people. This structure allows partners to share profits, losses and decisions.

• LLC

Consider this for small businesses seeking legal protection but simple formality. The LLC structure shields owners from personal liability.

2. Register your company name

You put a lot of time and effort into choosing the perfect name for your business. Protect it by registering it with the right agencies. Each name registration is legally independent.

• Entity name

This is how a state recognizes your business. It also protects your name at the state level. Name requirements vary, but may include distinguishability (name must be different from other similar names). For example, if the business name “Healthy Vitamins” is registered you may not choose “The Healthy Vitamins”. Another common name protection is purpose-related. For instance if your business is registered as “Henry’s Healthy Hub” then “Henry’s Healthy Properties” would likely be denied registration. Consult your state’s government website for business name requirements.

• Trademark

Trademarks protect your business name at a federal level. Visit the U.S. Patent and Trademark Office’s website for trademark searches and registration. Trademark applications must meet legal requirements prior to registration. To make this easy, consult an experienced trademark attorney. Or apply yourself. For help visit the U.S. Patent and Trademark Office’s step-by-step trademark filing tutorial.

• Domain name

This protects your business website address. A domain name is the name used for your website, like “www.vitawater.com” or “www.gingergells.com”. Domain registrars, like GoDaddy or Domain.com, register domains through the Internet Corporation for Assigned Names and Numbers (ICANN).

• Doing Business As (DBA)

Use this when the operating name of your company differs from the legal name. For instance, if you’re “Joan Doe” conducting business as “Natural Vegan Products” you may need a DBA. Some states require filing of this name to protect consumers. So consult your state’s government website for DBA requirements.

3. Obtain an Employer Identification Number (EIN)

Businesses located in the USA or a U.S. territory need to apply for an EIN. The IRS uses this free service to identify your business for tax purposes. Don’t fall for scammers charging for this service.

You can easily apply online. This requires a valid Taxpayer ID (SSN, ITIN, EIN) and the ability complete the application in one session. You can’t save the application and return to it later so keep this in mind. Also inactive sessions expire after 15 minutes. Apply online now. The system validates the information upon submission and an EIN is issued immediately.

You can also apply by fax, telephone and mail.

4. Obtain business permits and licenses

Avoid one of the most common mistakes made by new business owners: failing to obtain necessary permits and licenses. Make sure your business stays open by obtaining the required legal items.

• Business license

Contact your city to obtain a business license. This grants you the right to do business in your city. Other permits business permits vary. Check if you need fire department, air and water pollution control, sign usage, and county permits. Visit your local government website for more information.

• Sales tax license

Companies selling taxable goods and services must obtain a sales tax license. Requirements vary by state so check with yours.

• State licenses, certifications, and occupational permits

Most states require people working in select professions to meet legal requirements. So contact your state government office for a list of these professions.

• Federal business license

Some companies, like those selling meat products and fruits and vegetables, require this license. Consult the SBA’s licenses and permits site for more information.

• Health department permit and FDA registration

Companies holding, distributing, manufacturing and warehousing food to customers or wholesalers need both of these The Health Department will inspect your facility prior to issuing the permit. The FDA requires that you register so that in the event of a serious adverse reaction to your product(s), a product recall, etc. your contact information in the system allows for a swift response to protect public health and safety.

5. Draft legal documents for hiring contract workers

Do you plan to hire contract workers: individuals providing goods or services to a company who aren’t a company employee? For consultants, artists, web designers or other contract workers, make sure to obtain legal documents before work begins. Contractors may be difficult to track down later.

• Nondisclosure / Confidentiality Agreement (NDA)

Protect sensitive company information by requiring contract workers to sign an NDA. Click here for a sample Natural Product NDA / Confidentiality Agreement you can modify. Have an attorney review your NDA to ensure validity.

• Proof of qualifications

Keep a copy of the contract worker’s application, resume, and other proof that they quality for your job. Also make sure contractors realize they are filling out a contract worker application and not an employee application.

Verify their Tax ID and contact references to make sure the worker’s qualifications are valid. Also, conduct a background check if the contractor is working with sensitive information or providing in-person services to customers.

• W-9 Form

Independent contractors paid $600 or more per year need this form. You will need the contractor’s taxpayer identification number, name and address. The W-9 excuses your company from having to withhold payroll taxes for contract workers. It also provides the information needed to create a 1099-MISC Form for contractors for the tax year. The 1099 is the contractor equivalent of the W-2 form that you use for company employees.

• Written contract

Prepare a contract for each contract worker. This protects your business if a dispute arises. Make sure a contract includes the scope of the work, who owns the work, payment information, and an independent contractor statement. Have both parties sign the contract.

Even though it might seem tedious, take the time to meet your legal requirements. Remember business laws and regulations vary by industry and state. Understand which requirements apply to your business, and consult an attorney for necessary guidance when needed. If your company doesn’t have a legal team, don’t skip legal steps. Type “free legal help” into your browser to find free or inexpensive help. My browser returned over 2 billion hits on this search term. Sleep easy at night knowing you and your company are legally protected.

Kendeyl Johansen, a tech geek and award-winning journalist, creates multimedia health and wellbeing content.

Susan Ulery utilizes her legal background plus 20 years of manufacturing expertise in the dietary supplement industry to help clients overcome regulatory challenges.

Clean Label Essentials for Natural Product Companies

April 8, 2024August 6, 2018 by kendeyl

Want to understand your supplement ingredients without needing a biomedical engineering degree to decipher the label? You’re not alone. More consumers are seeking “clean label” products that offer transparent and simple labels. The market research firm Euromonitor estimates clean label global food and supplement sales will rise from $165 billion in 2015 to $180 billion by 2020. Boost sales by creating clean labels to attract buyers seeking transparency.

What exactly does clean label mean? It’s confusing because no formal agreed-upon definition exists. This stems from consumers desiring a variety of product characteristics: transparency, USDA organic, no artificial ingredients, non-GMO, hormone and antibiotic free, and locally grown.

People increasingly want specific product characteristics for their food and beverages, and they want to ensure products meet their needs or they won’t buy. Labels information can make or break sales. Make sure your labels are updated to meet the needs of targeted customers so they’ll choose your product.

Target Specific Customer Label Needs

Since there is no government-agency definition of clean label, consumers are just as confused as everyone else as to what this means. Buyers are clear on what they want, though. Discerning consumers seeking clean labels look for organic certification, fresh foods, familiar ingredients and easy to read and understand labels.

Discover your customer’s ideal needs so you can adjust labels to match. The easiest way to discover what people want is to ask.

A Cargill marketing study of 302 U.S. grocery shoppers found almost half would pay more for clean label products for their children. So if you’re selling supplements for kids, customer feedback may signal a popular desire for an organic-certified version. Add the organic certificate to your label to attract customers and drive sales.

Besides food consumed by children, Cargill found clean labels most appeal to consumers of functional foods. Marketers of these products can use clean labels to boost sales.

Provide Transparency and Simplicity

We’ve all stood in the grocery store puzzling over a product label bursting with multi-syllable mystery ingredients. People seeking clean foods will put that product down and reach for another item. These consumers want labels that are easy to read and understand.

This means the label ingredients are familiar and not difficult to pronounce. Once example of simplifying an ingredient list is to use vitamin B12 in lieu of the vitamin’s scientific name cyanocobalamin. There are 56 names for sugar. Keep it simple whenever possible.

Natural product companies can reformulate products to meet clean label demand. Maybe your product can be made with a shorter ingredient list or a more wholesome ingredient.

New formulations can be used as opportunities to create products with simple ingredient lists that appeal to targeted markets. Google natural product trends to find innovative bestsellers. Smart companies can discover new popular ingredient trends and capitalize on buyer needs.

Label Legalities

Make sure claims made on labels have research back up. You don’t want to end up with a supplement labeling class action lawsuit, like Universal Protein Supplements Corporation (which does business as Universal Nutrition, Universal USA and/or Animal Pak) which allegedly violated California law by labeling supplements “Made in USA”.

“Food companies must understand their product, its ingredients and its processing so labeling statements narrowly tailor claims to properly reflect the product,” says David L. TerMolen, partner and member of the food industry team at the Chicago law firm Freeborn & Peters L.L.P. The Institute for Legal Reform’s The Food Court Paper states food marketing class actions increased from about 20 in 2008 to over 425 active cases in federal courts in 2015 and 2016. Avoid court by using caution before making label claims.

Customers are paying more attention to product labels as they seek products that meet their individual needs. Although clean labels mean different things to different people, smart companies can use guidelines to target discerning customers. Why not grab your slice of the projected $180 billion clean label pie?

Kendeyl Johansen, a tech geek and award-winning journalist, creates multimedia health and wellbeing content.

Blog

April 19, 2025June 26, 2018 by Henry Wythe

QuickBooks Inventory Limitations

QuickBooks Enterprise Inventory Limitations QuickBooks Enterprise offers robust inventory management capabilities, but there are several key limitations that businesses should consider. Below is a detailed overview of what QuickBooks Enterprise cannot do with inventory management Serial Number and Barcode Limitations Barcode Scanning Restrictions Inventory Levels and Forecasting Reporting and Analysis Gaps Inventory Flexibility Other Usability ... Read more

How To Choose The Best Food Manufacturer – 10 Must Haves

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Managing FSMA compliance without losing your mind

According to the FDA, the “Food Safety Modernization Act (FSMA) is the most sweeping reform of our food safety laws in more than 70 years…” The overarching principle guiding the implementation of FSMA is FDA’s shift from detection and response to prevention. The basic steps for FSMA compliance are 1. carry out a hazard/risk assessment ... Read more

HACCP In Your Manufacturing Process

FDA Regulation of Dietary Supplements

How does the FDA regulate dietary supplements? The Food and Drug Administration (FDA) has regulated dietary supplements since at least 1938. At the time they were regulated like any other food, however. In the 1980’s they became defined as “food additives,” leading to a lot of confusion and inconsistent regulatory standards. The Dietary Supplement Health ... Read more