How do I record a one off amount as a stock write off? A neighbouring fire resulted in our warehouse losing power for a few weeks so some of our stock was damaged.

We'll issue an invoice to decrease the item count in your stock, ZNP12. Then, create a journal entry to remove the income, credit the customer in Debtors, and credit the Cost of Sales to account for the Expense.

If the amount you are writing off will impact your gross sales total, it is recommended that you consult your accountant before making this entry. Moreover, when entering these transactions, be sure to assign them the same date.

When you're ready, let's proceed and set up an expense account by following these steps:

1. Navigate to the Transactions menu on the left panel and pick Chart of accounts.
2. On the Transactions screen, select New to open the New account window.
3. From the Account Type dropdown, select Expenses and Advertising/Promotional for the Detail Type.
4. Enter a name in the Account Name field (for example, "Promotional/Samples - Not for Sale").
5. Click the Save and Close button.
   
   

Now that we've added the category, create an invoice for the item you're working on. In the Description and Message on invoice, enter a brief explanation of what happened.

Next, run a Profit and Loss report on the accrual basis to see the income and cost of goods amounts and then create a journal entry. Refer to this article for detailed instructions: Write off stock items given as promotional samples in QuickBooks Online. Go directly to the Run a Profit and Loss report section.

For tips on how to modify your item's quantity and correct the on-hand stock details, open each link below for the complete details:

• Adjust stock quantity on hand in QuickBooks Online
• Fix negative stock issues in QuickBooks Online
  
  

Fill me in if you have other inventory concerns or need guidance navigating QuickBooks. We're always ready to provide the help you need.

Thanks - but why would this be advertising/promotional? I cannot link it to a customer invoice as the stock was damaged prior to any deliveries? I do not have stock inventory either.

Thanks for getting back to us and sharing more info, ZNP12. I can share ways on how you can record the damaged stock items.

The Advertising/Promotional account in QuickBooks Online (QBO) is used to track stock items that are given for free samples to clients. However, since you want to track damaged items in the program, I've added the detailed steps below to track them.

To do so, we can set up an expense account to track the amount of the damaged items. Then, link them to a service item. 

Please note that it’s best to consult your accountant for advice to avoid any issues before performing the steps. They can also provide the best way to record these items in the program. If you don't have one, you can use our Find-an-Accountant tool to look for an expert near you.

First, I suggest creating an expense account to track the amount you lose for a waste stock item. What you need to do next is to add a service to the Products and Services page. 

Follow these steps to create the expense account:

1. Go to the Gear icon and then select Chart of accounts.
2. Click New.
3. Set the Account Type to Expenses, then choose the specific Detail Type. An accountant can help you record the account correctly.
4. Enter a name.
5. Hit Save and Close.

Then, we need to create a service item to link the expense account:

1. Go to the Sales tab and then select Products and Services.
2. Click New.
3. Select Service.
4. Enter a name.
5. Change the Income account to the expense account you created above.
6. Click Save and close.

Once done, create a sales receipt with the service you just created. Make sure to enter the correct amount of the damaged stock items. This way, QuickBooks will recognize the amount as a loss for your business.

Finally, you can run and customise various reports in your QuickBooks account to ensure everything is tracked accurately and track any discrepancies.

Should you require additional assistance with this process in QBO, please feel free to respond, and I will ensure to address your inquiry promptly.