Hi there, Mariacris.
When inventory converts to Cost of Goods Sold (COGS) after migrating from QuickBooks Desktop (QBDT) to QuickBooks Online (QBO), it comes down to how migration handles account mapping and inventory setup.
QBDT and QBO approach inventory accounting differently, which can lead to discrepancies during migration. If your QBDT included custom COGS accounts or unique account names, QBO may assign inventory items to an Expense account instead of the correct COGS account. Although both systems treat inventory as an asset that converts to COGS when sold. This can occur if the expense account field for each inventory item isn’t mapped properly, causing transactions to post to default accounts instead of the intended ones.
QBO requires an inventory start date during migration. If this date is incorrect or if opening balances weren't properly set, inventory values and cost basis won't match Desktop. This can cause inventory to appear as expenses immediately, rather than tracking properly as assets that convert to COGS upon sale.
If you have follow-up questions, feel free to leave a comment below.
