Question

Average Cost

Forum|Forum|5 years ago
October 19, 2020
2 replies
41 views

How do you correct the average cost on an inventory item? For an example, our copper pipe usually cost anywhere from $3-$4 per foot. The average is roughly $3.50 per foot. Somehow our inventory item in QuickBooks got the average cost at -$819.00. Does anyone know how I can correct this?

QuickBooks Enterprise Suite

BigRedConsulting

Level 15

The cost is based on your purchase history for the item, calculated from the beginning to date. It will also include inventory adjustments if you use them.

It's weird to see it be negative/backwards if that is what you are seeing. Not sure how you got there, but I'd focus on Credits and adjustment transactions to see if any of them look weird.

You might also Verify your company (File | Utilities | Verify) and if there are errors, review the results and see if any of them mention average cost for inventory items - specifically this one. If so, Rebuilding your file (File | Utilities | Rebuild) will recalculate the average cost.

V

VKniss - RDMAuthor

I tried the Verfiy Data and also Rebuild Data. It did not correct the problem. I also tried doing a manual item adjustment under Total Valve. It won't allow me to adjust the Global Cost. I don't understand how we got to the point with a positive quantity and a negative cost.

AlcaeusF

Level 14

Thanks for getting back to us, @VKniss - RDM.

Negative Inventory is sometimes caused by entering sales transactions before entering the corresponding purchase transactions. For example, you sell inventory items that you do not have in stock.

There are few ways on how to fix this depending on these scenarios:

Your first transaction(s) for an item are sales.
You have sold inventory items without recording purchases.
You have entered purchases or adjustments before entering sales.

Before performing the solutions, please take note of the following:

Back up the QuickBooks company file without overwriting any previous backups. Keep these backups in a safe place.
Consult with your accounting professional to assure that these changes are legitimate. It is not sufficient to adjust the current QOH to a positive value. You must eliminate each occurrence of negative QOH.
If there is an extensive negative inventory that is not easily repaired, a better option may be to start a new data file.

For the detailed steps on how to fix this issue, consider checking out this article: Fix negative inventory issues in QuickBooks Desktop (QBDT). It also contains the ways on how to prevent this in the future.

To learn more about managing/tracking inventory in (QBDT), please refer to this article: Understand inventory assets and cost of goods sold tracking.

Reach out to me in the comment section below if you have any other issues or concerns. I'm more than willing to help. Have a good one!