Hello,
I am very desperate for help and cannot find a solution and answer to my problems outlined below.
My company is a manufacturer. Historically, we've set up 'Inventory Parts' (based on our products) in the item listing just to create invoices for the customer. So inventory was not properly managed (negative quantity balances and $0 posted to a generic Cost of Goods Sold account for every AR invoice). We maintained our books and inventory GL accounts through general journal entries.
Recently, I tried to clean up everything within the inventory center and begin an actual process. My steps included:
1. Adjusting inventory quantities/value on hand to zero as of 2/28/21 (including inactive items)
2. Reorganizing our current items and recategorizing them as 'Inventory Assembly'
3. Updating each item profile to the correct GL accounts and user defined costs
4. Creating a fake vendor and fake bills to intake the actual quantity and value on hand as of 3/1/21 into the corresponding items / assemblies
But after completing these steps, Quickbooks is now recalculating costs based on the changed GL accounts and unit costs from Step 3 for every transaction using the item codes. So the $0 in COGS previously recorded in the generic COGS account is now recalculated based on quantity * unit costs in the newly mapped COGS accounts from Step 3. I did not want retroactive updates. There was no prompt from QB asking to update prior transactions. I just wanted a fresh start and process after my cut-off period of 2/28/21.
Furthermore, we sell 16 items (mapped as inventory assembly), but this error is only occurring with 7 items! There is no difference with how I've organized each product in their inventory assembly profile, so I don't understand the logic with QB's calculations. My goal is to keep the $0 cost posted prior to 2/28/21, and now my historical COGS are overstated and my inventory is understated with these 7 items. The other 9 items are fine and accurate.
Based on the Understand inventory assets and cost of goods sold tracking, the Inventory Valuation Summary suggests that the 7 impacted items have a fixed 'Average Cost' that is being used. Please see my attached screenshot. The average costs for these were obtained when I updated the cost amount in the item profiles, but now they're being used to recalculate COGS historically.
These are the things I've tried but failed in correcting the issue:
(a) Outside of the reorganized item listing and updated item profiles, I tried deleting all my steps to no avail
(b) I've updated the user defined cost to $0 for each assembly
(c) Changing the mapped COGS account in hopes QB would recognize the change to recalculate based on the $0 user defined cost
(d) Verifying QB data, rebuilding QB data, and using QB Tool Hub to run QB File Doctor
(e) Chatting and calling tech support with Intuit
Prior to (a) in deleting all of my steps, the other 9 items that were not impacted were properly calculating COGS after the 2/28/21 cut-off date. The historical COGS prior to this date still remained as $0. This was our expectation for all items.
Other notes:
i. We currently use FIFO in the advanced inventory settings
ii. We did not update the Bill of Materials for the inventory assemblies
iii. After updating items to $0 cost in profile, we created invoices but the items still post a cost based on the initial unit cost we entered
I have backed up a version of the company file right before we implemented the steps, but restoring the file would cause us to lose a week's worth of work among several users. So this is not ideal, but the last resort.
I'm an accounting user and I understand information systems quite well, but I am completely lost and in desperate need of some guidance. Can anyone please help me understand if I'm missing something? Thank you and much appreciated.
