Looking to downgrade from Plus to Essential. I use inventory module now. What happens to my data in Products when I downgrade? How do I enter items in invoice afterwards?

I’m glad to answer these queries so you’ll know what to expect once you downgrade from QuickBooks Online Plus to Essentials, @howardse.

If you downgrade from QuickBooks Online Plus to Essentials, your items stay in the program. However, your inventories won't display on your Product and Services list anymore, and the quantities reset to zero.

Concerning your second question, the answer is yes. You still have the product module and can continue to enter items such as non-inventories, bundles, and services into invoices as before.

Besides not being able to track the quantity of each item sold or remaining, downgrading removes any discounts on your current plan, project profitability, and decreases included users. See our Plans and Pricing page to compare their available features.

The summation of inventory worth in the balance sheet will be impacted, specifically in the Asset section of the report. That is because the system will no longer track the quantity of each item purchased or invoiced when the inventory function is removed.

To get around this, you can use your financial reports specific for products and services for reference. This way, you have records of your current quantities on hand, the number of items purchased, and invoiced.

Then, you can manually create accounts for tracking inventory value, cost of goods sold, and transactions. Check out this article for a more comprehensive guide and instructions: Track inventory manually in QuickBooks Online.

I’m adding this guide to learn more about the downgrade procedure and steps to get back to your old subscription level in case you’re interested in utilizing the feature for good: Upgrade or downgrade your QuickBooks Online edition.

I’ll be here anytime if you need more information on how inventories work in the system or have other concerns managing your account, @howardse. Just add them to your reply below.

Thanks for taking the time to respond. A follow-up please. If after a couple of months I feel the downgrade is not for me, and I later upgrade back up, will my inventory data remain and return functionality to before?

Allow me to explain what will happen to your inventory data once you decide to upgrade again, howardse.

In QuickBooks Online (QBO), when you downgrade from Plus to Essentials, you must make your inventory items inactive, since this subscription level doesn't support inventory tracking. Then, you need to run financial reports customized to the product/service list to have a record of the current quantities on hand of the inventory items.

Once you decide to switch back to Plus, all your inventory data will not remain. Only the items. You just need to activate them again. Then, use the record from the report you made to manage your inventory data especially the quantities on hand for each corresponding item. 

Check out this article to help you lock your books so no one can edit your accounting data before the closing date: Close your books in QuickBooks Online.

Drop a comment below if you have further questions about managing your inventory data and I'll circle back to help you. Stay safe!

@howardse 

You may also consider converting your data to QB Desktop before downgrading your plan. You can use the trial version to open it  later.

1. All inventory, cost of goods sold, purchase, and sales account info will convert
2. QuickBooks Online use FIFO calculation method, while Desktop will use average cost. This may account for any discrepancies after conversion
3. QuickBooks Enterprise inventory settings will be set to FIFO
4. For negative inventory:
QuickBooks Desktop will record the COGS and Inventory Asset as zero on the sale. The COGS and Inventory Asset will be recorded on the purchase of new inventory.
In QuickBooks Online, on purchase of the new inventory, the COGS and Inventory Asset will be added to the original sale transaction.
Quantity on hand will match QuickBooks Online as of the conversion date