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Inventory Upload and Holding Account

Wondering what the best way to handle this is . . . . we buy miscellaneous items individually (typically one-off purchases) ...As such, our daily inventory purchases are for over 100+ items. When those individual expenses come into our Quickbooks as a credit card payment, we debit them to a generic inventory holding account (not trackable to a specific SKU). When our clerk processes each individual item after it arrives, our listing management software creates an excel sheet based on SKU, ITEM, and PURCHASE PRICE. We are going to import that spreadsheet into Quickbooks and track our sales based on SKU. Since we are going to debit the specific SKU in our Quickbooks inventory, we will need to credit the generic inventory holding account.

 

What is the best way to do this? We would like to automate it as much as possible. Preferable, every time we import a debit to a specific SKU, we would like the corresponding credit to be to the generic inventory holding account --- this way, the balance in the inventory holding account represents unprocessed inventory that we haven't received or processed yet.

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Re: Inventory Upload and Holding Account

"our daily inventory purchases are for over 100+ items."

 

Which means you are using the method called Periodic Inventory, because this is not specific products. No, don't try to manage in QB per "SKU" because you will have too many Unique one-off.

 

"Since we are going to debit the specific SKU in our Quickbooks inventory, we will need to credit the generic inventory holding account."

 

Well, you never use Debit-Credit in QB if you intend to manage by Product, so that would be a mix of concepts.

 

Here is how you manage Periodic Inventory. You examine what is your most likely scenario: everything has fast turnover, or a lot of stuff of significant value is on hand over a longer period of time. That helps you determine if all new purchases post the debit to Asset, or the debit to COGS. Then, Periodically which is monthly or weekly or quarterly, or at least at year end, or Daily from a Separate POS system, you rebalance Asset and COGS for what is still on hand and what is no longer on hand, to match Sales income to that Expense activity, to have a profit proper reported for that Period.

 

"Preferable, every time we import a debit to a specific SKU"

You never do that in QB, you make all entries with the Purchase screen or the Adjustment screen and it lists the actual products. You don't Debit the product. You enter a value for that activity, and it affects accounts for you, behind the scenes. Try not to take manual control, if you intend to use Product Names. That would break the relationship between the product-based reporting and the Account-based reporting.

 

"we would like the corresponding credit to be to the generic inventory holding account"

That is backwards. Inventory as a Holding account for Asset is always Debit = increase value on hand. It's your Source Of Spending that is the Credit, such as AP (bill) or Credit Card account or Checking. Credit Inventory = relieves it  from being on hand, because it is Gone = sold, typically, or broken, damaged, stolen, etc.

 

"this way, the balance in the inventory holding account represents unprocessed inventory that we haven't received or processed yet."

 

There is no such status as Processed or not. The accounting is: We bought stuff and that is the value now on hand. If you mean, a prepayment, that still will Debit an Asset account as the Holding account. The Credit is the Spending side.

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