Inventory Valuation Report Changes / Sales Order Item Receipt and Bill Entry

Hi there and thank you for sharing detailed information on how you manage the inventory entry in QuickBooks Desktop (QBDT), Maverick2.

In your case, you receive the item before the invoice. In QBDT, you can receive inventory without a bill.

Use this option if you received the items but the vendor did not provide the bill yet. This will create an Item Receipt that increases your inventory asset account and accounts payable.

Here's how:

1. Go to Receive Inventory dropdown, then select Receive Inventory without a bill.
2. On the Item receipt window that appears.
3. From the dropdown, choose the vendor name.
4. Select Yes to receive a purchase order for the bill.
5. Choose the correct PO, then select OK.
6. Review the information on the Item Receipt. Note that except for the Memo field, any fields that were filled in on the PO are carried over to the Item Receipt.
7. Select Save & Close.
8. When you receive the bill for the inventory, proceed to Entering bills against Inventory.

Receiving inventory is part of your usual Accounts Payable (A/P) workflow. To see the complete list of workflows and other vendor-related transactions, refer to this article: A/P workflows in QuickBooks Desktop.

I'm adding these readable articles to let you know how QBDT handles inventories and how to enter them into the system.

• Understand inventory assets and cost of goods sold tracking
• Learn how to receive inventory with or without a bill in QuickBooks Desktop.

Get back to me if there's anything else you need I'll be around to answer your questions.

Thanks for the reply but I think you misunderstood what I am asking.

I do know how to enter the bill after item receipt.

Plus, as first stated this is QB Desktop and not QBO.

1. Go to Receive Inventory dropdown, then select Receive Inventory without a bill.

is not an option anyway.

The question is stated as follows:

On QB desktop.

I found a quirk relating to a unique situation I sometimes have. Here's an example:

1. We receive into QB 10 items from a PO on September 30. Inventory is increased by 10 and the value by the related amount. The valuation report reflects this change (+10 pcs).
2. I receive the invoice a week later, but the date on the paper invoice from the supplier is October 7. When I enter bill from received items on October 7, I enter the QB bill date as October 7.
3. QB then REMOVES 10 pcs from the September 30 valuation report, and plops into into inventory as of October 7, and messes up our inventory valuation report that was actually printed AS OF Sept 30 and printed ON Sept 30.
4. Printing the report again in October after that supplier invoice was entered creates a difference. Inventory was already done and adjustments made.

Why do suppliers do this with their invoices? Don't ask me... It happens with a nice handful of them.

My workaround for this is to enter a fake bill date in the month the items were received, (not what's printed on the paper invoice), and manually change the due date.

I guess my question is if this is just a weird way QB works or am I doing something wrong?

@Maverick2  RE: I guess my question is if this is just a weird way QB works or am I doing something wrong?

Well... It's not weird, exactly.  The inventory receipt transaction was invented to let you put things into inventory before you got the bill, so that you could then sell them, which reflects how things work in the real world (you can sell something even if you haven't received a bill for it...)

But, also, QuickBooks always uses the posting date of each transaction that includes inventory items to calculate a perpetual running cost for each item, which is used on sales as the COGS amount.If you change the dates of the receipt of inventory items, this code has to re-run to recalculate the average cost of each item. If you always pay the same amount for an item, you won't notice this happening, but if you pay different amounts over time, then changing the date of your purchases and sales changes the history of the cost of what you have to sell on the dates of the sales.

In response to this issue, QuickBooks offers something they call Enhanced Inventory Receiving.  It solves the issue by leaving the inventory receipt alone and creating a bill on a different date and then tying the two transactions together. A sort of a two-step.  I'm not sure on which QB SKU's it's available.  It seems to be an Enterprise only feature.  If you have Enterprise, find the option to turn it on at Edit | Preferences | Items & Inventory | Company Preferences. Then see the option near the bottom of the window called Enhanced Inventory Receiving.

If you don't have that option then it's probably not available in your SKU, or perhaps only if you purchase Advanced Inventory, which I think is free with Enterprise, and perhaps why I can see the option on my Enterprise installations.

In this case, your other option is to leave the date the same when converting the Item Receipt to a Bill. It's reasonable I think, from an accounting POV, because you did acquire the inventory on the date of the receipt and not on the bill date.