I'm working to setup inventory / COGS tracking in Quickbooks Online. All of my items are setup in Quickbooks and the relevant items have inventory tracking enabled already (they have had this enabled for some time).
I would like to use inventory / COGS reporting for all of the current year (2017) and I have an accurate inventory count for end of year 2016. I also have sales transactions in QBO for 2017.
I would like to add my 2016 year end inventory totals to Quickbooks so that the reporting (of COGS and inventory amount) are accurate. Can I simply add an inventory adjust for every item and set the adjustment date to 12/31/2016? Will this adjust my books properly? Will the transactions that occured after 12/31/2016 be properly reflected in the inventory?
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When you set up the inventory items, did you change the as of date to 1/1/17?
If not, then that is a problem, QBO will not allow transactions for inventory before the as of date.
Are you taxed as a sole proprietor or partnership?
If you have a the current correct starting account balances entered, how did you do that without a starting inventory? Are the owner/partner equity accounts correct in QBO as compared to what they were in your previous books?
In 2016 did you buy the items for inventory as inventory assets or did you use an expense account for the purchase?
Your accurate count of inventory for 12/31/16 - does that include cost per item on hand?
You have to consider the other side of the entry. The posting increases the balance in the Inventory Asset account, but you have to tell QBO the other side. Where did this come from? Normally you increase inventory with a bill or check/expense and use an Inventory Item. So the other side reduces your bank balance or increases your payables. You can't use bank because that will change your bank balance. If you have already paid for the items, what expense/asset account did you debit for the payment?
As for the 2017 sales, the second part of the posting to every sale, apart from debit (increase) cash/AR, credit Sales, is to credit (reduce) the inventory asset and debit (increase) COGS, with the FIFO method (QBO) which considers the cost of every transaction (including adjustments) for the item, to come up with the current cost. So it is important you enter the correct cost - what you actually paid.