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user29949
December 11, 2018
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How do I track damaged inventory loss or company use items?

  • December 11, 2018
  • 2 replies
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Best answer by

Self-used inventory can be entered as an 'internal bill' - create a vendor for "yourco (internal)"

Create a bill from this vendor.

Enter a (negative) amount of items taken from stock, use the current average cost as the price

then enter and categorize an expense using the same value as above - with no sales taxes.

The total for an internal bill must always be zero - you cannot owe yourself money.


If by damages stock you mean that you want it removed from inventory:

Same process as above except categorize the expense as damage.


Both these can be also be done via "inventory adjustments" - but I find the internal bills easier to understand and much more flexible to enter and edit.


2 replies

A
Anonymous
Answer
December 11, 2018

Self-used inventory can be entered as an 'internal bill' - create a vendor for "yourco (internal)"

Create a bill from this vendor.

Enter a (negative) amount of items taken from stock, use the current average cost as the price

then enter and categorize an expense using the same value as above - with no sales taxes.

The total for an internal bill must always be zero - you cannot owe yourself money.


If by damages stock you mean that you want it removed from inventory:

Same process as above except categorize the expense as damage.


Both these can be also be done via "inventory adjustments" - but I find the internal bills easier to understand and much more flexible to enter and edit.


U
user29949Author
December 11, 2018
I'll try that!  Thanks so much!
T
Thibcli
June 5, 2020

I am a self owned company that does staging for real estate sales. I recently lost all of the furniture I used for staging in a warehouse fire. How do I properly record this loss in Quickbooks Online? Please understand that I'm still learning how to use Quickbooks so explain in a way that a rookie can understand. Thank you.

JoesemM
JoesemM
June 5, 2020

You've come to the right place, @Thibcli.

 

There are two ways on how to record the loss of your furniture in QuickBooks Online. I'd be delighted to walk you through the process.

 

The first process is to write off the bad debt, this refers to accounts receivables that will not be collected in QuickBooks.

 

To start, let's create a bad debts expense account:

 

  1. From the Accounting menu, select Chart of Accounts.
  2. Click the New button.
  3. From the Account Type drop-down menu, select Expense or Other Expense.
  4. From the Detail Type drop-down menu, select Bad Debts.
  5. Enter Bad Debts in the Name field.
  6. Select Save and close.

 

Then create a bad debt item:

 

  1. Go to the Gear ⚙ in the upper right corner.
  2. Under Lists select Products and services.
  3. Click New, and then Non-inventory.
  4. In the Name field, enter “Bad debts.”
  5. From the Income account ▼ drop-down, select Bad debts.
  6. Select Save and Close.

 

Once done, you can proceed to Step 4 and Step 5 in this article: Write off bad debt in QuickBooks Online.

 

The second process is to use the Adjust Inventory option in QBO to update the number of your stocks. 

 

  1. Click the + New button.
  2. Under Other, press Inventory Qty Adjustment.
  3. Enter the Adjustment Date and complete the details of the transaction.
  4. Hit Save or Save and Close.

 

Here's a great resource to guide you with the adjustment on inventory tracking: Adjust inventory quantity on hand in QuickBooks Online.

 

I'll be more than happy to share additional insights and assistance with QuickBooks whenever you need it. Have a good one!

 

R
rwmout
February 9, 2021

I have completed the Inventory Adjustment Process as described above, but I do not see a report that would indicate the cost of the inventory that we lost due to shrinkage.  Please let me know if there is a report that will reflect the cost of each item of inventory that was lost.  Thank you

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