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taze83
Level 1

COGS & Build Assemblies

I joined a company that had several years of invoicing without every building the assemblies that were being sold.  When I ran the inventory valuation it showed nearly 1.2mm in items, and -1.068mm in assemblies.

I began cleaning up and have brought the inventory in line by processing build transactions - and have brought it down to approx 250k current inventory, and the majority of negative assembly items cleaned up.

 

The problem now, however, is that the P&L is reflecting a negative amount in the COGS - Manufactured assemblies account.  1) Why would this happen?  We've spent nearly 1mm in components and it appears to not be reflected here.   2) Is there an adjustment that can be made to correct this and adjust the COGS account so that the P&L reflects more accurately for this year?

7 Comments 7
Rejeil_O
QuickBooks Team

COGS & Build Assemblies

Hello there, @taze83.

 

Let me step in and assist you with your concern.

 

You can check on how you generated the inventory sell. Make sure that you've entered the price and rate for each quantity for the purchase transactions. In that way, it will not show your COGS as a negative amount in your Profit and Loss report.

 

Please follow these steps to edit the price and rate:

 

  1. Go to the List menu.
  2. Select the Item List tab.
  3. Choose the item you want to edit.
  4. Enter the Sales Price of the item in the field.
  5. Hit the OK button to save.

 

We also advanced inventory feature to help you track inventory stored at different sites or locations.

 

Please know that I'm always around here in the Community to help. Take care, and have a great day.

taze83
Level 1

COGS & Build Assemblies

@Rejeil_O  - are you saying if I go edit an item even after the build transaction, that it will correct this?  One example I'm looking at had a sales amount already entered - it was incorrect, so I fixed it - but it still had one.  After correcting it, in the Item it still had no effect on the COGS - Manufactured Assembly account.

Candice C
QuickBooks Team

COGS & Build Assemblies

Good Morning, @taze83

 

Thanks for reaching back out to the Community.

 

Inventory COGS is only affected by selling inventory items on invoices and sales receipts. When you sell inventory items, you can run the Transaction Journal Report to see that the Inventory Asset account is credited and the COGS account is debited. You can check out these two links below for more information: 

 

 

To have some clarification on the issue, can you please provide some screenshots on where you're seeing this information within your QuickBooks Desktop (QBDT) account? This will allow me to determine the best solution for your business. 

 

I want to make sure that you're able to get back to running your business. The Community is always here to have your back. I'll be waiting for your response. 

taze83
Level 1

COGS & Build Assemblies

@Candice C  Here are a couple of screenshots.... 

First is the P&L showing the negative balance in Manufactured Final Assembly..

Second is within the account - some of the build transactions driving it down

Finally - what it looked like at YE2019 (and every prior year as well).

 

As mentioned, they never did any build transactions to relieve inventory, and I'm wondering if this is a "correction" the system is doing that should actually be spread across previous years?

 

Rea_M
QuickBooks Team

COGS & Build Assemblies

Thanks for the complete description of the issue and the screenshot above about COGS and assemblies in your QuickBooks Desktop (QBDT) account, @taze83. With this, I can guide you on the actions you need to take care of the issue.

 

Based on your screenshot above, I can see that your build assembly is the one with the negative balance instead of the total Manufactured Final Assembly. Yes, this might be the system's way of correcting the previous year's inventory records. With this, you'll have to drill down the transactions involve to identify the cause of the negative amount and if the correction is spread across prior years. Here's how:

  1. Go to the Reports menu.
  2. Select Company & Financial, then choose the Profit & Loss report you want.
  3. Set the date in the Dates field.
  4. Click the Refresh button.
  5. Double-click the Build Assembly amount to open the Transaction Detail report. Any number that's negative (credit) is the problem.  
  6. In the Transaction Detail report window, double-click the negative amount to drill-down the details.

 

I've attached a screenshot below that shows the last four steps.

 

After reviewing your data, you'll be able to determine the transactions associated with your assembly. Then, to check what your P&L report's Manufactured Final Assembly total looked like for YE2019 (and every prior year), you'll have to change and set the date. Then, make sure to refresh the report to implement the update.

 

To learn more about how QuickBooks handles inventory assets and Cost of Goods Sold (COGS), I'd recommend checking out this article: Track inventory in QBDT. It also provides a detailed explanation of your average cost.

 

You can get back to us and share whatever you've found out after reviewing your P&L report. Just select the Reply button below. I'm just around to help. Take care always.

taze83
Level 1

COGS & Build Assemblies

@Rea_M  I'm trying to follow these steps - but after I go to P&L, double click in the Final Assembly COGS negative amount, it opens the detail report showing the many credit numbers to the account associated with the build assemblies - but if I double click on those, it only opens the build transaction, nothing revealing in terms of dollars and cents.  Is there another step I should be taking?

Rea_M
QuickBooks Team

COGS & Build Assemblies

Hello there, @taze83.

 

When you're unable to get further details about the COGS negative amount through the P&L report, you can pull up another one. This is to further investigate the cause of the negative Final Assembly COGS amount in your QuickBooks Desktop (QBDT) account.

 

Negative Inventory can show up not just in the P&L report, but also on the following reports:

  • Inventory Valuation Detail (IVD) report
  • Negative Item Listing report

 

Since you're using the Enterprise version of QBDT, let's focus on the Negative Item Listing report. Just a heads up that the said report will show current negative quantities but not the past ones. Here's how:

  1. Go to the Reports menu.
  2. Select Inventory.
  3. Choose Negative Item Listing ( also called as Negative Inventory Listing).
  4. Find any negative amounts. Then double-click it if necessary.

 

Additionally, to prevent your inventory assemblies show incorrect COGS on your reports, you'll have to avoid selling build items with insufficient quantity. To learn more about the effects of your negative assembly on your company file, kindly check out this article: Fix negative inventory issues in QuickBooks Desktop. It also outlines steps to fix issues from negative inventory.

 

Leave a comment below if you have follow-up concerns regarding the Final Assembly COGS amount. I'm just around to help. Keep safe. 

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