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Ostara
May 27, 2021
Question

Write off perishable goods without an inventory

  • May 27, 2021
  • 1 reply
  • 0 views

Hi,

 

I am a florist and I don't keep a precise inventory because it would be too complicated to manage­. I buy flowers and plants by the box while I sell them either individually or within a bouquet, and the prices change almost every week. So I use COGS accounts to keep track of my expenses: 1 - Plants and flowers / 2 - Shipping / 3 - Supplies.

 

Of course, I have to write off flowers and plants almost every week, but what I would like to do is writing off an amount and I do not know which account(s) to create/use for the journal entry.

 

If you need any other details please let me know.

1 reply

N
Nick K
May 27, 2021

Hi Ostara,

 

Welcome to the QuickBooks Community! This is where our community comes together to help share knowledge and help each other out. It's great to have you here! I can help point you in the right direction on how to decide which accounts to use when writing off inventory. 

 

QuickBooks Online allows you to easily keep track of your inventory to keep your accounts and items on hand accurate. You can adjust your inventory by creating a journal entry to write off any damaged or old products. Before doing so I recommend reaching out to an accountant as they're trained in what accounts to make for the write off balance to go to. If you don't have an accountant no worries, we've got your back.  In your QuickBooks Online account you can go to My Accountant>Find a pro to help to find one in your area.

 

Once your accountant lets you know what accounts to make you can follow these steps to add them to your Chart of Accounts:

 

 

  1. Go to Settings ⚙ and select Chart of Accounts.
  2. Select New to create a new account.
  3. In the Account Type ▼ dropdown, choose an account type.
  4. In the Detail Type, select the detail type that best fits the transactions you want to track. 
  5. Give your new account a name. 
  6. Add a description.
  7. If this is a sub-account of an existing account, select Is sub-account and then enter the parent account.
  8. Now let's make sure the account in QuickBooks matches your real-life bank or credit card account. Choose when you want to start tracking your finances. In the Balance field, enter the amount in the account, and determine the as of date. Enter today's date if you want to start tracking immediately.
  9. When you're done, select Save and Close.

Once the account is made you can use it in making a journal entry by going to:

 

  1. Select + New.
  2. Select Journal entry.
  3. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
  5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  6. Enter information in the memo section so you know why you made the journal entry.
  7. Select Save and new or Save and close.

Feel free to reach back out if you have any questions! 

 

Have a great one!

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