Skip to main content
B
BernieJ
March 24, 2020
Solved

Updating inventory cost and pricing when using Enhanced Inventory Receiving

  • March 24, 2020
  • 3 replies
  • 0 views

When entering a purchase order for an inventory item that has a new price, a box pops up asking if you want to update the cost and price of the item.  Is it best to select no if you are using FIFO costing? 

 

For example:  You have 10 widgets in stock that you paid $5/pc so the current cost for the widget is $5/pc.  You then buy 10 more at $7/pc.  If you select "yes" to update the cost, will Quickbooks change the cost of the orignal 10 widgets from $5 to $7 (meaning all 20 widgets in stock will now be costed at $7/pc)?  If you select "no" so the cost is not undated, then will Quickbooks keep the first 10 widgets costed at $5/pc and assign the newly purchased widgets costed at $7/pc?

    Best answer by Rose-A

    Greetings, BernieJ.

     

    Yes, it will affect if you select the Yes or No option when turning on the inventory feature in QuickBooks Desktop. Selecting "Yes" can affect your cost from the previous parts, while selecting "No" will stay as-is.

     

    Here are some interesting articles to learn more about the FIFO feature and how it works in QuickBooks Desktop:

     

    Feel free to get back to me if you require more information about this. I'd be more than willing to provide additional assistance. Have a good one and stay safe!

    3 replies

    S
    Steve_C
    March 24, 2020

    Hey BernieJ. Thanks for reaching out to the community. If you have FIFO inventory tracking selected inside of your company preferences then this won't affect your inventory negatively. 

    However this can cause issues if you may have cost averaging selected instead. I'll list the steps for you to check bellow

    1. Select Edit in the top left then Preferences at the bottom
    2. From the left menu, select Items & Inventory, then choose the Company Preferences tab at the top
    3. Select Advanced Inventory Settings, then choose the FIFO tab.
    4. Select Use FIFO starting on and choose a date.

      Note: QuickBooks recalculates all inventory-related transactions starting on the date you enter. You can start tracking FIFO on any date. If you decide to turn off FIFO later, uncheck Use FIFO starting on, and QuickBooks will once again calculate inventory value using the average cost method.

    5. Select OK then OK again to close the Preferences window.

    You may also want to check out our article on FIFO Options in QuickBooks Desktop Enterprise. Let me know if you have any other questions, let me know I'm happy to help. 

     

     

    B
    BernieJAuthor
    March 25, 2020

    Hi Steve,

    We do have FIFO inventory turned on.  Let me make sure I understand correctly... with FIFO inventory turned on, it does not matter if we select yes or no to update the cost when the box pops up on a new purchase.  Selecting yes or selecting no will not affect the cost of previously received parts.  Is that correct?

    U
    User_1234
    October 22, 2021

    I know this is an older conversation, but I am currently still having the same issue. When I receive an item at a new cost, but don't want it to change my current cost (since the inventory I currently have was at the old price) I would select "No." If I select "No" will that cost automatically switch to the newest cost once I am out of my older inventory that was previously set at a different price - so long as FIFO is set up in our system? 

      P
      psscale
      February 11, 2022

      The 2nd paragraph explains the YES or NO on new inventory.  

       

      My understanding is that if you REALLY want a true FIFO, you select NO.  

       

      If you select YES, then you are using LIFO.

       

      This is very confusing & it doesn't seem correct for QB to ask you about updating the cost if you have chosen FIFO as your preference.  Seems choosing FIFO should make that question obsolete and/or incorrect.

      Terms & ConditionsAccessibility statement