Dear Sir or Madam,
Please help me out here - I have a negative inventory value given zero inventory qty.
By looking at the details it is obvious that is due to the unit cost variance. My opening inventory was of 2,746 pieces at $2.515 each totaling $6,906.94.
I had to make an adjustment to move it all out in the following year. The unit cost per transaction changed and ranged on this between $4.51/ea to 4.30 ea, bringing my total quantity to zero and value to ( 5,080.35).
Please see the print screen below.
As we do not control the unit cost when the qty adjustment is made, how can I correct my inventory value here?
Please advise.
Thank you very much in advance.
Date | Transaction Type | # | Qty | Rate | FIFO Cost | Qty On Hand | Asset Value |
Beginning Balance | 2746 | $6,906.94 | |||||
04/01/2021 | Inventory Qty Adjust | 8090 | -729 | 4.51 | -3,289.34 | 2,017.00 | $3,617.60 |
04/01/2021 | Inventory Qty Adjust | 8090 | -70 | 4.49 | -314.25 | 1,947.00 | $3,303.35 |
04/01/2021 | Inventory Qty Adjust | 8090 | -6 | 4.49 | -26.94 | 1,941.00 | $3,276.41 |
04/01/2021 | Inventory Qty Adjust | 8090 | -115 | 4.34 | -499.15 | 1,826.00 | $2,777.26 |
04/01/2021 | Inventory Qty Adjust | 8090 | -70 | 4.34 | -303.83 | 1,756.00 | $2,473.43 |
04/01/2021 | Inventory Qty Adjust | 8090 | -6 | 4.34 | -26.04 | 1,750.00 | $2,447.39 |
04/01/2021 | Inventory Qty Adjust | 8090 | -1750 | 4.30 | -7,527.74 | 0.00 | -$5,080.35 |
Thanks for providing the complete details of your inventory value concern, @Tali.
Let me guide you on how you can correct your inventory value to keep your financial data accurate in QuickBooks Online (QBO).
You can pull up the Inventory Asset account's QuickReport to find the transaction(s) that cause your negative inventory value. To do this, here's how:
Once you find all transactions causing the discrepancy, make the necessary updates to correct your data.
In case your negative inventory value issue continues, you can make adjustments by creating a journal entry. Before doing so, I encourage you to consult your accountant. They can guide you what the appropriate accounts to use and provide expert advice tailored to your business needs.
Also, you can use reports to see your best sellers, what’s on hand, and the cost of goods in QBO. To guide you with the process, you may want to check out this article: Use reports t see your sales and inventory status.
Please feel free to leave a comment below if you have other concerns about managing inventory value in QBO. I'm always ready to help. Take care, @Tali.
Hi Rea_M,
Thank you for getting back to me so quickly
I've noticed that the transaction that caused this discrepancy was from the point where inventory was moved from the Desktop to the Online version, which was in a different year.
The system made 2 transactions called START and on one of the transactions, the unit cost was $1.90 which is what's causing this big negative balance.
Please advise how exactly can I correct it. I know how to correct the overall inventory value through Journal Entry, however, I would like to correct it so that this particular inventory item shows zero balance going forward.
Please guide me through this.
Thanks&Regards,
Tali
Good afternoon, @Tali.
Thanks for coming back to the Community and providing further details about the negative inventory value.
With the information you described, I recommend creating and using a Journal Entry to help fix this problem like my colleague said above.
If you're unsure about this route, consulting with your accountant to be sure of how to properly correct this for your books would be best.
Don't hesitate to reach back out if you have any more concerns. Keep us updated on how the conversation goes with your accountant. Have a wonderful day!
Hi Candice,
Thank you for the follow-up!
Journal entry doesn't take care of the specific inventory asset, it can be only done to adjust the overall inventory value.
Please advise how to correct the specific inventory asset value. My accountant doesn't have an answer to it.
Thanks
I'm not sure if you ever got this resolved but try adding $5,080.35 to the starting inventory value. Find the product (Sales > Products and services) and click on 'Edit'. Under Quantity, next to Adjust: click 'Starting value'. You will need to add $1.85 to the initial cost if your initial quantity on hand is 2,746. That will add $5,080.35 (2,746 X $1.85) to your starting value and should zero out the Asset Value. Select COGS under 'Inventory adjustment account' since your COGS account is overstated by $5,080.35.
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