QBO - Invoices Adjusting Inventory Before Payment is Received/Ownership Changes

Bayliefullmer · ‎May 06, 2020

My company sells high end electric motorcycles, which are invoiced through QBO. We have a major issue with the reporting of our inventory, and the adjustments being made when invoices are created.

Our current process is:

1 - Customer reaches out to place an order either via a sales rep or our website.

2 - Customer is invoiced via QBO and is sent a link to pay their invoice via QB Payments

3 - Customer pays for their invoice in full

4 - Once the invoice is paid in full, the bike is removed from our physical inventory and shipped to the customer

Our issue lies in the adjustment being made in Step 2, rather than Step 4. We have many customers that are invoiced but don't pay until several days, or even weeks later. I have seen suggestions online for using Estimates to record the sale without adjusting inventory, but we are unable to do this since our customers pay through QB Payments (QB Payments is currently the only way we collect payments at this time). From time to time, we have customers that decide not to complete their order as well. Our inventory is reporting everything that we have invoiced for, rather than what we have actually sold.

What is the best way to allow customers to make payments through QB Payment, but adjust inventory only after they have paid?

JasroV · ‎May 06, 2020

Good day to you, @Bayliefullmer.

I appreciate you for sharing the details with me. In QuickBooks Online (QBO), once you create an invoice for the product or services item. It'll automatically adjust your inventory even if the invoice hasn't been paid. QBO reserve the item for that invoice and accurately tracks your inventory.

However, since your customer pays their invoices for several days or weeks after. It would be best to use the Sales receipt feature in QBO. The Sales receipt is used when your customer immediately pays for the products or services at the same time of sale. This way, you can adjust your inventory once your customer pays you. Or, you can just create an invoice in your Payments account. From there, it'll not affect you inventory item.

Furthermore, here's an article you can read to learn more about whether you should use an Invoice or a Sales Receipt. This link provides detailed information about how to record your sales accurately in QBO.

In addition to that, do check our Income and expenses page and learn some tips in managing your income effectively.

You can always get back to me whenever you need help. I'm more than happy to help you. Take care and more success in your business!

Bayliefullmer · ‎May 06, 2020

Thank you for responding.

I would be fine using sales receipts rather than invoices, however since our customers pay via their QB invoice through QB Payments, this creates an issue. How do I still give them a link to pay without adjusting inventory? Or should I just move the company away from QB payments all together, and use a different payment processor, and then enter sales receipts once they have paid via the other payment processor?

Ryan_M · ‎May 06, 2020

Hi @Bayliefullmer,

Thank you for your prompt reply. I'll take care of your follow up questions.

You can create invoices from the QuickBooks Payments app. Once these are paid in full, they will automatically flow into your QuickBooks Online (QBO) company where your Payments account is synced to.

In the case where a customer cancels transactions, you can either void or refund that QuickBooks Payments transaction.

Using a different app that can manage your transactions outside of QBO is also another option that's available for you.

Take a look at this article: Process payments in the Merchant Service Center. Here you'll learn how to process credit cards and e-checks in the Merchant Service Center.

Feel free to leave a comment below, if you have other questions in mind. I'll get back to you.

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QBO - Invoices Adjusting Inventory Before Payment is Received/Ownership Changes