Hello,
I use QBDT 2020 and have an issue that I do not know how to fix. I am a contractor, and I generally buy the equipment and materials needed for each job, and the purchases are recordered as COGS for the job. A long time ago, when I first my contracting business, I spent some time entering things like wire and other little parts that I bought in more of a bulk fashion into inventory. Then if I used up some of the stock for a job, I deducted some lengths of wire, and the adjusted quantity of little widgets as they were used for the job. I soon came to realize this was not going to work, as I did not often know how much wire was left on a spool, or how many little widgets were left in a box in my truck, etc. The costs for these things was generally very minimal. So I quit tracking any of these things in inventory and just bought what I thout I needed for each job, charged the cost to each job, and if there was a little wire left over from the job, I threw it on a shelf and if it was long enough to use later, I used it. If not, I might take it to recycling center, whatever.
The problem I have is that there is several hundred dollars of "inventory" still in my Quickbooks file, and I have not touched anything involved with inventory in years. I never track inventory in Quickbooks, and don't do anything with inventory on my Schedule C, etc. But now, I have a dilemma, since I had to buy a large quantity of a particularly expensive product to have on hand in order to be able to complete jobs that I will be installing, and will likely have some left after the fiscal year is over. This is an exception to my rule of not tracking any inventory and just buying materials for particular jobs. So my question is, how do I get rid of the several hundred dollars of the old inventory mess, and add and work with only this one inventory item to make my accounting make sense and not cause issues on my schedule C at tax time. For example, if I bought 100 of item A, and used 20 for Job1, 20 for Job2, and 20 for Job3, and have 40 left, how do I enter that purchase and each inventory change? And how is the 40 left impacting P&L, and my Schedule C? And, how do I make sure the inaccurate old inventory with the several hundred dollar value does not mess this up?
Thanks.
