I was previously doing my accounting in Quicken, and converted that file to Quickbooks Pro Desktop. I went through all my imported accounts, line by line, and put every transaction in what I thought the appropriate account. It then occurred to me that my items ought to be converted to inventory items, and I went through that list as well, converted them, and adjusted all the quantities on hand accordingly. However, when I run a P&L, or a tax detail report, this grossly misrepresents my actual profits, as the inventory items both came out of expenses when I invoiced them, and in the payment to my vendors. My accountant told me it was a mistake to convert all my items to inventory, and that based on the size of my business, I should just leave the vendor payments as expenses, and the invoices as income, and do everything on a cash basis. That's all well and good, but I can't fix it. I tried duplicating my items as non-inventory parts, then making the inventory ones inactive, then go back and replace them on the old invoices and re-adjust the quantity on hand. My reports bottom lines did not change, it just added a bunch of inventory item adjustments that balance out to the same mess I had before. Quickbooks does not allow me to delete them altogether as the adjustment entries still exist, even though they aren't on invoices anymore. But those same adjustment entries are now causing the same double expenses, just on different lines. I do not need to track inventory, I'm primarily a service contractor that sells items as part of the services I provide, I don't keep stock, except as items I purchased but never used.
I desperately do not want to scratch my file and start over. It was converted months ago, and I did not realize the discrepancies until I was preparing for my taxes. My accountant is not interested in telling me how to fix this, he's just going to prepare my return (and in his defense, he's swamped right now). It's too late in the season to get another in any case, and I'm now staring at not only 2017's returns, but my first quarter estimated taxes (my company is a sole member LLC). I need to know (1) what the proper way to deal with inventory is going forward, so I don't make this even worse, and (2) fix my old entries so they properly reflect my profits. I would be fine paying someone to fix the file, but if I really do have to start over, I also need to know the correct way to catch up on all the transactions that were not part of the original Quicken file.
