My Inventory account on the Balance sheet with accounting method accrual is coming with a negative sign; how can I fix it?

The balance is based on the transactions you've entered into QuickBooks. You can see what makes up the balance by double-clicking the value on the report.

Generally, an inventory account with a negative balance suggest you've oversold your inventory, that you've sold more than you've purchased. Could that be the case?

I have reviewed the inventory valuation report, and they correspond to the inventory adjustments that we have made. We make these adjustments when we use parts in machine repair or when we add parts that we remove from the machines we buy.

But I think something is missing to be done or we are not doing it correctly so that the account does not look negative.

Does anyone in the community manage parts inventory?

Hi there, @parts-inmotionsg.

To better understand the issue you mentioned regarding the account appearing negative, could you please provide some additional information or screenshots? This would help us identify any potential gaps or missteps in the process and work towards finding a solution.

1. Could you share specific examples of transactions that led to negative values in the account?
2. Are there any particular steps or procedures you think might be missing or not being executed correctly?
3. Could you provide screenshots of the inventory valuation report or any related reports showing the adjustments and negative values?

We're committed to resolving the issue and ensuring accurate inventory management. Your cooperation in providing the requested information will be greatly appreciated.

We sell machines and parts to repair these machines, in some cases to repair machines that we buy and use to resell them later, we use parts in stock that are for sale, and in some opportunities, we use parts from those machines to put them into inventory for later sale.

And to reduce or increase the inventory for this situation, we use the adjustment option; now, if we buy new parts or machines, we do it through the Purchase Order option.

Thank you for getting back here in the Community, @parts-inmotionsg. Let me guide you on how you can correct your inventory value to keep your financial data accurate in QuickBooks Online (QBO). 

When using QuickBooks Online, it's possible to sell more products than your actual stock. To prevent this, it's important to check the quantity of products on hand in your inventory before placing an order for more. Once you've confirmed that the count is accurate, you can safely order additional products.

The quantity on the purchase order being negative is caused by creating an invoice or sales receipt before entering the corresponding purchase transactions. If you miscounted your physical inventory, especially if the quantity in QuickBooks would be different when the items have been billed. Even though you deleted the Purchase Order (PO), it will show as negative. I'll be providing a screenshot to show you the result.

To solve this issue, ensure that the number of items in the invoice is not more than the total number of items in the purchase order. Also, make sure that the number of items in the purchase order is greater than the number of items invoiced to your customer.

Also, you can check out this article as a guide for the detailed steps on fixing negative quantity and what causes negative inventory: Fix negative inventory issues in QuickBooks Online.

For additional references about managing inventory in QBO, check out these articles:

• Adjust inventory quantity on hand in QuickBooks Online.
• Use reports to see your sales and inventory status. 

Feel free to leave a comment below if you have any other questions about inventory management. I'm always here to help. Have a good day!