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Perform a physical inventory in QuickBooks Desktop for Mac

Learn how to do a physical inventory in QuickBooks Desktop for Mac

Physical inventory is the process of verifying or connecting the on-hand item quantities in your inventory by doing a physical count. This is recommended after you enter your inventory for the very first time.  You can use QuickBooks to create a worksheet for taking a physical count of your inventory stock.

Perform a physical inventory

Performing a physical inventory is essential in determining whether you later need to do an adjustment or not.

  1. Go to Reports, then Inventory and then select Physical Inventory Worksheet.
  2. (Optional) Select Customize to see the Format tab. 
  3. (Optional) Change the width of the columns and adjust the appearance of the worksheet.
  4. Press Command P on the keyboard.
  5. As you check your stock, fill in the quantities for each item in the Physical Count column of the worksheet.

Adjust your inventory quantity or value

QuickBooks automatically adjusts your inventory quantities after every purchase and sale, but you may need to adjust them yourself to account for things like loss or shortages. Here’s how. 

  1. Go to Vendors, then Inventory Activities then select Adjust Quantity/Value on Hand.
  2. Enter the name of the expense account where you track inventory loss and shortages in the Adjustment Account field. If you need to assign the expense to more than one account, enter a separate adjustment for each account. To enter additional adjustments, select Next
  3. Enter the new quantity of each inventory item. You can also enter the new quantity by entering the difference in the Qty Difference column. To enter a difference that reduces the quantity, type a minus sign before the number (for example, -25).
  4. (Optional) If you need to, edit the value of the inventory after adjusting the quantity. QuickBooks will recalculate the value based on average cost. When you edit a value, you change the average cost of the items in stock. To edit the value, select the Value Adjustment checkbox. In the New Value column, enter the value for each inventory item whose value you want to change.

Quantity on hand

Quantity on hand is the number of items you have in stock. QuickBooks automatically keeps track of this number for all the invoice items on your Item list.

Adjustment Account: The name of the account where you track adjustments to inventory. For shortages and losses, the account is an expense account. For inventory you didn’t know you had, use an income account. Enter the name of an account to record the adjustment.

Class: (Optional) The class you want to assign to the adjustment transaction. This field appears only if you selected the “Use class tracking” preference in the Transaction Preferences window.

Current Qty: The current quantity on hand for each inventory item. You can’t enter information in this column.

Current Value: The current value of each inventory item. You can’t enter information in this column. This column appears only when you select the “Value adjustment” checkbox.

Customer:Job: Use this field when you sell an inventory item to a customer, but don’t include the item on the invoice. For example, you might have entered a single line item to cover the cost of the entire job without listing separate line items for each inventory part you sold. By entering an adjustment and assigning it to the customer (or job), QuickBooks is made aware of the change to your inventory, and the inventory item appears as a job-related cost in job profitability reports.

Date: The date of the adjustment transaction. QuickBooks automatically puts today's date into this field. 

Description: The sales description for each inventory item. You can’t enter information in this column.

Item: The item codes for each inventory item. You can’t enter information in this column.

New Qty: The new inventory quantities. When you enter a number, QuickBooks automatically displays the quantity difference in the Qty Difference column. You can enter the quantity difference instead of the total quantity. See “Qty Difference” below.

New Value: The new values for your inventory. Entering a new value changes the average cost of the items in stock. This column appears only when you select the “Value Adjustment” checkbox. 

Qty Difference: Quantity differences. To enter a difference that reduces the quantity, be sure to type a minus sign before the number. You can enter the total quantity instead of the quantity difference. See “New Qty” above.

Total Value of Adjustment: The value of the adjustment. To calculate the value, QuickBooks multiplies the average cost of the item by the quantity difference.

Value Adjustment: Select this checkbox if you want to change the value of the inventory after you’ve adjusted the quantity.

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