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Anonymous
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How would you handle an inventory liquidation or prolonged discount period?

What’s the best way to handle cases where a business is discounting a large part of their inventory (relocating stores, seasonal stock change, etc) for a prolonged period of time?

 

Would you apply a discount per item for the duration of the sale? Would you create new “discounted” versions of your inventory items? And would you continue to track sales in the same income and Cost of Goods Sold (COGS) accounts, or create new sub-accounts? 

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Level 15

How would you handle an inventory liquidation or prolonged discount period?

a sale, regardless of price is income, no reason to make a new income account, same for COGS

 

if you are using desktop I would create a price level list, and apply that list to the sale during that period.

 

In QBO, i think, but I have not played with it, you could use a price rule too - i'm not sure QBO has the functionality to do it though, but worth a try

 

if you want to track dollar value during the sale, create and use a class for those transactions

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Anonymous
Not applicable

How would you handle an inventory liquidation or prolonged discount period?

Good recommendation @Rustler. If a store owner wants to run a report on just those items, though, would it make sense to create a sub income account? 

 

Also, out of curiosity, are there any special conditions to the FIFO principle in cases of liquidation or going-out-of-business? 

 

I was at a local piano store this weekend that lost its lease and I've been thinking about these questions ever since. 

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Level 15

How would you handle an inventory liquidation or prolonged discount period?

Inventory valuation methods have nothing to do with sales

If you use a class you can run a class report or sales by class summary / detail

 

QB works with items, and reports on items, cluttering up the P&L with accounts by event is just not the efficient way to do things

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