Non Profit

Hey @ADNugent,

You can record this in QuickBooks by using a journal entry to account for the decrease in inventory and track it as a donation or expense.

Set up an account for donated goods under your Expenses category if you don’t already have one. This will help you track the value of gifts you distribute. When you distribute the items, create a journal entry to reduce inventory and record the expense. Debit your "Donated Goods" expense account for the cost of the items you're donating. Credit your inventory account for the same amount to decrease your inventory.

This process removes the items from inventory while recording them as a donation or expense.

@ADNugent 

When you say "these are entered as inventory", do you mean they are entered as inventory items or just recorded to your Inventory Asset account directly?  A journal entry will not remove an item from inventory, it can only reduce the inventory balance.  If you enter the items as inventory items, then you need to use a Sales Receipt, Invoice, or Inventory qty adjustment to remove the item(s) from inventory when you donate them.  You can sell them on a Sales Receipt or Invoice for $0 or make an Inventory qty adjustment and choose the expense account that you want to book the expense to under 'Inventory adjustment account'.  It really depends on how to want these transactions to appear in your books.  

These are entered as inventory items so I need to reduce the quantity as well as the value.

@ADNugent 

It depends on what expense account you want to use for the donations.  If you want to expense them to COGS, create a sales receipt for $0.  That will expense the cost to COGS without booking any revenue.  If you want to expense the donations to a different expense account, you can make an inventory quantity adjustment and choose the appropriate expense account under 'Inventory adjustment account'.