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Level 3

how does tracking inventory affect payable and receivable

Can someone walk me through the process of the end result for tracking inventory? I have product that I purchase and resell. My inventory is entered under the "Products and Services" as "Purchases" for the "Expense Account" with the amount I paid for the product. It is also under "Sales of Product Income" for the "Income Account" with no amount.

 

When I sell a product, I enter it on the invoice with the matching SKU # and the info of the product comes up automatically. I enter the amount on the invoice that I sold the product for. 

 

Now this is where I get lost....

The item is updated on my "Inventory Valuation Summary" to show 0 quantity and 0.00 cost now.

However, it is still including the amounts on my "Balance Sheet" under "Inventory Assets-1". How does this all affect the final totals on the accounting end? And shouldn't my Balance Sheet match the new amount of Inventory? 

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how does tracking inventory affect payable and receivable

Thanks for providing us a clear information on what you're trying to accomplish, dal1cas2.

 

Let me bring some clarity to your concern about how inventory tracking works in QuickBooks Online (QBO).

 

There are a few reason why there is a discrepancy in the Inventory Asset account. Among these are:

  • You have transactions to Inventory Asset account that do not have inventory items.
  • You have inactive inventory items that have a non-zero value.

If your Balance Sheet and Inventory Valuation reports show different amounts for Inventory Asset account, we can pull up your Balance Sheet and double click the Inventory Asset item so we can customize the filter to match it with the  Inventory Valuation Summary report.

 

Here's how:

  1. Go to Reports.
  2. Search for Balance Sheet.
  3. Double click the Inventory Asset amount.
  4. Set your preferred report date range.
  5. Click Run report.

To learn more about how inventory and reporting is supposed to work in QBO, feel free to visit this link: How to set up Inventory and tracking.

 

If there’s something else you need to know about tracking inventory, please don’t hesitate to let me know. I’ll keep an eye out for your reply.

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