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BT-BT
Level 1

Inventory

Hi - 

 

I'm using Desktop 2019 and I feel like I'm missing something obvious.

 

We do NOT have inventory but I have set items up for my client (designers) as inventory items in order to track them on reports  (you can drill down on the balance sheet and then tell the report to total by client).  It posts the bill amounts correctly, BUT when it posts the invoice it's a random number.  At first I thought it was mark-up, but it's not.  (see attached)

 

I've looked at my preferences and don't see anything obvious.

 

Help, please, or I'm going to have to go in and re-do a LOT of stuff.

 

Thanks.

 

BT

 

 

7 Comments 7
Ryan_M
QuickBooks Team

Inventory

Thank you for the detailed post, along with the screenshot of what you're referring to, @BT-BT. Let me answer this query for you. 

 

I believe you're referring to the Inventory Asset account from the Balance Sheet report. When you drill down into it, you'll get to the Transactions by Account report. Amounts you can see on the invoices in this report are the Cost of Goods Sold for that specific invoice and isn't the total amount owed for it. 

 

I'll share a few screenshots to provide further details on this matter. See the one below as an example:

 

 

Invoice 1043 shows a 630 credit amount on the report. If you drill down on the invoice itself, you'll see where the system got the amount. When you have the invoice open, follow these steps:

 

  1. Go to the Reports tab.
  2. Select Transaction Journal.

 

You'll then see a Transaction Journal report that looks like this:

 

 

Notice the line for Cost of Goods Sold shows the amount 630. It's the same amount you can see on the Transactions by Account report I shared above.

 

Take a look at this article for more details on this process: Understand inventory assets and cost of goods sold tracking

 

Don't hesitate to tap the Reply button if you have other questions about inventory items in QBDT. I'll get back to you as soon as I can. Have a great day!

BT-BT
Level 1

Inventory

Hi Ryan - 

 

Hopefully this isn't a duplicate reply.

 

Is there any way to turn off the cost averaging?  The whole purpose of this was to create the report from the balance sheet account?

 

Thank you.

 

Betty

 

ReymondO
QuickBooks Team

Inventory

Greetings, @BT-BT.

 

Allow me to join in this conversation and provide you with some information about using the average cost in QuickBooks Desktop (QBD).

 

Right now, there isn't a way to turn off the average costs in QBDT. QuickBooks uses the weighted average cost to determine the value of your inventory and the amount debited to COGS when you sell inventory. The average cost is the sum of the cost of all of the items in inventory divided by the number of items.

 

 

I can see how this option would be helpful for you and your business. Therefore, let me take note of this as a suggestion to improve your QuickBooks experience.

 

In case you have any questions about an average cost, your best course of action is to run the Inventory Valuation Summary report. This shows you how QuickBooks got the item's average cost.

 

  1. Go to Reports and select Inventory.
  2. Click Inventory Valuation Summary, then set the dates to All.
  3. Double-click the item in question.

 

You may find these articles helpful too:

 

 

Let me know if you have further questions about inventory items in QBDT. I'll be here to help. Keep safe.

Fiat Lux - ASIA
Level 15

Inventory

@BT-BT 

If you need to job cost materials to your projects, consider having a construction management app to integrate with your QBD.

 

inventory in construction maangment app.jpg

BT-BT
Level 1

Inventory

Thank you.

 

It would be very helpful to turn off the cost averaging  in order to take advantage of the some of the reports that could be created.  One of the best things about QB Desktop is the ability to quickly drill down, change a few options and create a wonderful, useful report.

 

Thanks.

 

Betty

 

BT-BT
Level 1

Inventory

Thank you but it's not really job costing materials to a project.  Similar but not quite.

 

I've already reset my items and will utilize another report that is almost, but not quite, as good as the one that could be created from the Balance Sheet.

 

qbteachmt
Level 15

Inventory

@BT-BT 

 

"The whole purpose of this was to create the report from the balance sheet account?"

 

Here's what you overlooked: Inventory carries a Value as initial asset from Purchase transactions; then that value is removed from Asset and posted to COGS when it gets sold, along with the removal of the quantity sold. The sale is the income. So, inventory has three account activities and Count, which should never run negative or you impact your financial data.

 

What you want for Job Reporting is to use Services, Noninventory and Other Charge type items, and never use inventory item type as Pretend, because that makes a mess of the financial data. You want the Services, Noninventory and Other Charge types to be "two sided" or Reimbursed, to show a Cost account data flow and a sales account data flow, if you want to see Profit by Item, in that it is something you incur and charge back. Otherwise, you only need the one linked account, which can be Balance Sheet. WIP, for example, or Construction in Process, is entirely Balance Sheet.

 

The Item based reporting works fine for you if you need to link your items to Balance Sheet accounts, such as a law firm takes retainers (held as liability) or a contractor requires prepayment, or makes prepayments (asset account tracking). What you do is modify the account filter on the Job reports to not use income/expense only. You can, for example filter on account = Retainer Liability, and Total by Name, and now a law firm sees the total on hand by Client. A Contractor would manage Asset accounts, using Items to estimate and manage Spec properties, and total by Name. Or, Columns by Name.

 

A significant amount of accounting errors occur when you use inventory in a pretend manner. Relying account-based reports, when you want Items- and Job- (name-) based reports, also would be a limitation you bypass, by using the Item and Job reports, and using Items and Item Types correctly, to control the flow of the data. You control if these are linked to one account or to two; if they are Balance Sheet or not; and you control the reporting. When it comes to inventory, you don't have that control, and you have to work with the assumption that this really is Stuff Kept on Hand, bought and sold, the same Thing or Widget, every time. Because that is the definition of Inventory.

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