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Level 1

Inventory Shrinkage

After I entered the inventory in the system, the system started to show 'inventory shrinkage'. There is no discrepancy in our physical product quantity and inventory numbers. I don't understand why it says shrinkage. I entered Sales as Income Account; Cost of goods sold as Expense Account; Inventory Asset as Inventory asset account. I hope somebody will be able to help me. Thanks.

1 Comment 1
QuickBooks Team

Inventory Shrinkage

Good day, @apkoymen,


Inventory Shrinkage is one of QuickBooks Online's pre-created accounts. This is automatically created once you adjust the quantity on hand on your inventory product. QuickBooks uses this account to record all the changes or adjustments.


If you need to undo the adjustment, you can delete it to remove any records of adjustments. However, this will not remove the Inventory Shrinkage account in the system.


Let me guide you through on how to achieve this:


  1. Click the Search icon at the top right.
  2. Click Advanced Searchquantityadjustment1.PNG
  3. Search for Inventory Quantity Adjustmentquantityadjustment2.PNG
  4. You can filter the adjustment to see the desired item.
  5. Click to open the item. quantityadjustment3.PNG
  6. Click Delete, then select Yes to confirm. quantityadjustment4.PNG

You can read through this article for additional information with the solution above: How to adjust inventory quantity on hand.


I've also added an article if you need to edit the adjustment, please check out this link: How to edit an inventory quantity adjustment.


Keep me posted if there's anything I can help you with entering your inventory in QuickBooks Online. I'm always around whenever you need help.

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