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Jonnyred
Level 1

Help with inventory transfers

Hello

 

i need some help, i have quickbook desktop premier plus. i have 2 identical skus setup, one to receive inventory and one for when i send it to my warehouse.  Its the same item but the sku numbers are different obviously.  I have been transferring with no problem, until there was a large price decrease on the item.  The first sku or the one i receive inventory on is much lower now with the new cost, when i go to transfer that inventory that 2nd sku it has the higher avg cost (from previous transfers), its now creating a large cogs discrepancy when transferring and effecting my p and l, making my cogs go down when it shouldnt. i have adjusted both items to the new lower cost but the avg cost on that 2nd item is still at that higher cost.   is there a way to get around it?

2 Comments 2
ChristieAnn
QuickBooks Team

Help with inventory transfers

Thank you for visiting the QuickBooks Community again, Jonnyred. I'll ensure you can manage your inventory data in QuickBooks Desktop smoothly.

 

To start with, please know that QuickBooks uses the weighted average cost to define 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. For example, you purchase a widget for $2.00. The average cost is $2.00. You purchase a second widget for $1.50, the average cost is now (2 + 1.5) / 2 = 1.75. You sell a widget, the inventory/COGS transaction debits COGS for $1.75 and credits inventory for $1.75. You purchase another widget for $2.00. Now your average cost is (1.75 + 2.00) / 2 = 1.88.

 

Then, since you already adjusted both items and the avg cost on that 2nd item is still at the higher cost, I recommend reviewing the details entered in the adjustment section. This is to ensure that your inventory data stays accurate. Also, you'll have to make sure that you enter the updated information with the right items to ensure the avg cost of your items is correct.

 

If the issue persists, I suggest running the Verify and Rebuild Data Utilities to get this sorted out. The Verify Data utility identifies potential data damage issues that might've caused unexpected behavior of the average cost of the item. Before this, you'll have to secure a backup copy of your company file.

 

To Verify data:

 

  1. Go to the File menu. 
  2. Scroll down to Utilities.
  3. Select Verify Data.

 

If you see “Your data has failed the integrity check” you need to rebuild your file. If there are no problems with your data, you’re done.

 

To Rebuild Data:

 

  1. Go back to the File menu.
  2. Choose Utilities.
  3. Select Rebuild Data.
  4. Click on OK to close all windows.

 

For further details, you can open this article: Verify and Rebuild Data in QuickBooks Desktop.

 

Lastly, you may refer to this article to see steps on how you can remove items in QBDT: Add, edit, and delete items.

 

Feel at ease to comment back below if you have more inventory concerns or any QuickBooks-related. I'm still up and running to answer them for you, Jonnyred. Have a great day!

Jonnyred
Level 1

Help with inventory transfers

Hi thank you for the response, could you elaborate on this Since you adjusted both items to the new lower cost but the avg cost on that 2nd item is still at the higher cost, I suggest making sure that you enter the updated information with the right items to ensure the avg cost of your items is accurate.

 

I believe quickbooks is doing things correctly, but i do need to move this inventory.  When qb's creates this adjustment to cogs after my inventory transfer, is there a way to offset maybe? ie: journal entry?

 

Separate note: what i found odd was on the original item, which has the correct avg price on it (latest price).  That sku was used to buy previous inventory at a higher price, one would think the avg price would be somewhere in the middle of 2 purchase prices, the high and the low but thats not the case.  

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