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M
MRK9
December 17, 2023
Question

Inventory

  • December 17, 2023
  • 1 reply
  • 0 views

Thank you for taking the time to read this. I manage a dog boarding kennel. We purchase large amounts of dog food. Most of it we use in the kennel. I keep inventory so I know when to purchase more. It is already an expense when we pay the bill. Sometimes clients purchase a bag, so rightfully, that decreases the inventory. But as I decrease (inventory adjustment) the inhouse use it adds it to my sales. How do I do a correct inventory adjustment? Please let me know if you have any questions to further explain. 

 

1 reply

S
Shania_C
December 17, 2023

It's great to see you here in the Community, @MRK9.

 

Allow me to share insights into your concern about how to correct your inventory adjustments.

 

To begin with, I wanted to ask what process was performed in recording the purchased bag of the client. If it was recorded as an invoice then the clients would be required to pay for it, since QuickBooks Desktop keeps track of every purchase and sale to update inventory quantities and value.

 

Creating an inventory adjustment decreases the inventory quantity but should not impact sales. Sales will only increase if an item is sold from the inventory without the inventory adjustment process.

 

If you did not record a purchase for your client and only adjusted your inventory, it will decrease the inventory quantity but not be added to sales.

 

Additionally, here are some articles that you can read to help speed up your workflow in QuickBooks Desktop:

Adjust your inventory quantity or value in QuickBooks Desktop

 

Thanks for giving us the details of your concern. I'm here to help some more if you have other questions about Inventory Adjusments in QuickBooks Desktop. Have a great day ahead!

M
MRK9Author
December 17, 2023

Thank you for your prompt response. When we receive the shipment and pay the bill it does get recorded into inventory. We do issue an invoice for our clients purchases, hence reducing the inventory. When I do an inventory adjustment for what we use in house, my sales increase. I may be using incorrect catagories ie.. COG vs something else?? How do I fix that and start over?

S
Shania_C
December 17, 2023

Thanks for coming back and sharing the details of your concern, @MRK9.

 

In order to effectively manage inventory, it's important to have a good understanding of how QuickBooks deals with inventory assets, average cost, and Cost of Goods Sold (COGS). This article will guide you through the process of calculating the average cost and help you identify which report will be most useful for inventory management:

Understand inventory assets and cost of goods sold tracking

 

Inventory adjustment is the process of changing the quantity or rate of an item. It includes any increase or decrease in product quantity that is not due to a sale or purchase. 

 

Indeed, if you don't want to increase the sales for the in-house inventory you can create a separate item for this in QuickBooks Desktop. Then a separate item for those you bill to the client.

 

Note that it’s best to reach out to your accountant for advice before you adjust inventory value. 

 

Moreover, I'll be sharing this article to help you in your future work in QuickBooks Desktop:

Add, edit, and delete items in QuickBooks Desktop

How to set up inventory in QuickBooks Desktop

 

Feel free to reach out with other questions or concerns about Inventory in QuickBooks Desktop. I'll be glad to assist. Keep Safe!

 

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