How do I track Food Loss and Spoilage in QuickBooks Online?

bill-levine-gmai · ‎August 06, 2023

I make food products in my business, and occasionally I have loss or spoilage. So I use cost of goods value to make something, and instead of getting the income from it, I have to toss it and would like to track this.

Should I just create an expense category, and add expenses and debt the cost of goods to the spoilage account? Something like that?

Amanda-B · ‎August 07, 2023

Hey there bill-levine-gmai,

Thank you for contacting us here. Ensuring that you record your transactions correctly is an essential step in maintaining clean books. I would be happy to provide some information.

You can adjust your inventory by creating a journal entry to write off any damaged products. However, to ensure the accuracy of your books, I recommend that you contact an accounting professional for expert advice. They will be able to point you in the right direction so that your accounts can end up with the correct balance. Having an accountant can be beneficial for you and your business. You can add your accountant to your books by going to the My Accountant tab in your QuickBooks account. You can also find an accountant who has experience with QuickBooks near you by clicking the Find a professional to help you option in this section.

If you have any further questions, please do not hesitate to contact us here.

bill-levine-gmai · ‎August 07, 2023

In our bookkeeping, we do not track inventory. We purchase raw materials (groceries) several times a week as COGS, produce ready to eat food, and sell it. After 4 days or so, it will spoil if left and so we loose that product. And my question is, how do we write that off as a loss.

Should we do a transfer from COGS to a 'Spoilage and Loss' account for the cost of the inputs for the products that spoiled? Or treat it as an expense for the cost of the inputs?

And should it be the cost of the inputs or the loss in revenue from the missed sales?

Thank you!

JamesM4 · ‎August 08, 2023

Hi there. Thanks for chiming in on this thread. In order to accurately record your transactions, I highly recommend consulting an accounting specialist for expert suggestions. This ensures your books remain accurate while you continue to manage your work with peace of mind. You can also get in touch with a professional using this link here. Other accounting professionals are able to see this post in the Community and this will allow them to chime in.

Let me know if this info helps. Otherwise, feel free to ask questions in the comments below.

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How do I track Food Loss and Spoilage in QuickBooks Online?