QBO: Other > Inventory Adjustment. Auto creates account called Inventory Shrinkage if it does not already exist. Even if I choose a different account. Bug/Feature?

Hi, can you tell me WHY QBO automatically assigns an adjustment to Inventory Shrinkage? 

Hi there, Sweetunda.

Inventory Shrinkage is one of QuickBooks Online's pre-created accounts. As mentioned by my colleague above, 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 wish to use another account when creating adjustment, click on the drop-down arrow under the Inventory adjustment account and choose the correct account you want as my peer provided.

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.

Here's how:

1. Click the Search icon at the top right.

2. Select Advanced Search.

3. Search for Inventory Quantity Adjustment.

4. You can filter the adjustment to see the desired item.

5. Click to open the item.

6. Select Delete, then select Yes to confirm.

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

Please check this article on how to check your inventory so you'll always have an accurate count: Fix negative inventory issues in QuickBooks Online.

If you have any other concerns, don't hesitate to let us know. I'm here to help.

This is so dumb.

1) The account should be named Inventory Adjustment, not Inventory Shrinkage. There are times when you need to adjust the inventory upward, like in the event of finding lost inventory.

2) If you change the name of the Inventory Shrinkage account to Inventory Adjustment, the next time you make an inventory adjustment, quickbooks automatically makes a new account called Inventory Shrinkage and defaults to using it for the adjustment.

Please fix this.

Hey there, @rtm.

I understand how beneficial being able to change the name to Inventory Adjustment. Right now, making it inactive or changing the name to a different one will not get rid of the Inventory Shrinkage account.

For now, the only workaround available is to create your own account and choose it every time you make adjustments (see sample screenshots below). 

We take these suggestions as a guide on which area of the product we should improve. I’ll submit feedback on your behalf about this feature for consideration in future updates.

Your voice is important to us, and we take customer’s suggestion as an opportunity to guide us on which area of the product we need to improve on.

To stay updated about the latest features being rolled out, visit the QuickBooks Blog page.

If there’s anything else I can help you with, click the Reply button and post a comment. I’ll be right here ready to help you. Have a good one.

Thanks so much! Apologies for the delay in responding. 

I am adding inventory adjustment as a new account. I have a few questions:

Should account type be cogs?

Detail Type I imagine should be supplies and materials

Should it be a sub category to Inventory(other current assets) / inventory asset (other current assets) / inventory shrinkage (COGS) / or no sub category?

Here is the situation we purchased 10,000 units to resell and the vendor always provides a few extra.  So we dont purchase them. But i want to make sure inventory is correct. 

How can I batch delete the IAQ? I have several products and would like to delete the IAQ for them in one quick step.

Thank you

I can help you remove your inventory items in QuickBooks Online, @rughdesign.

QuickBooks Online has a Batch action feature that allows you to make your items inactive in just a snap. Let me guide you through the steps:

1. Click the Gear icon.

 2. Select Products and Services.

 3. Mark the items you'd like to remove.

 4. Click the Batch actions drop-down.

 5. Choose to Make inactive.

6. Click Yes to complete the action.

You also have the option to restore deleted products or service items. Please check out this article for the complete steps: How to edit, delete, and restore list elements.

Please let me know if you need further help with your inventory management. I'll be glad to work with you at any time. Have a good one!

Hello, I'm looking for some help with the following issue;

I have started a new company and instead of adding the inventory to the first purchase order I added it as a starting quantity amount when I uploaded the inventory list. I then adjusted the amounts of each inventory to 0 and then added the amounts to the purchase order like I should have done originally. I now have a problem with Inventory shrinkage and it is effecting my Profit and Loss Report. 

How can I remove the Inventory shrinkage and original starting value in the Inventory Asset account on QuickBooks Online?

Thanks

I would like an answer to @Dvorak24 question as well. I moved warehouses and have had to re-adjust inventory quantites quite a bit. On my P&L it now shows a sizeable number in Inventory Shrinkage. How can I fix this???

We can fix this by adjusting the inventory, hosbrook41.

Let me guide you with these steps:

1. From the + New button, select Inventory Qty Adjustment.
2. Enter the Adjustment Date.
3. In the Inventory adjustment account field, select the appropriate account.
4. Enter  new quantity for each item.
5. Click Save and close.

Afterward, let's try running the Profit and Loss report again. If you want to modify the data on the report, you can check this reference: Customize reports in QuickBooks Online.

I'll be around if ever you need help. Keep safe!

Hello,

I did as you said but the P&L did not change. I probably should have said that I am working on the P&L for 2020 taxes. What can I do to fix this?

Hi there, @hosbrook41,

Thanks for sharing in-depth details about the issue you're getting with the adjustment posting on your financial reports.

Have you tried doing this in a private window and check if the same thing happens there? Unexpected issues in QBO are most likely affected by the large data in the cache. This is because the regular browser will constantly accumulate data and will not remove its history automatically.

The incognito mode will not save any history, so it's a great place to identify issues in the browser. Use these keyboard shortcuts to launch a new private window:

• Google Chrome: press Ctrl + Shift + N  
• Mozilla Firefox: press Ctrl + Shift + P
• Safari: press Command + Shift + N

If it works there, clear the cache to resolve the issue in regular browsing. 

However, if the same thing happens, I highly recommend getting in touch with our Support Team to report the problem. To contact us, follow these steps below:

1. Go to the Help menu in QuickBooks, then choose the Search tab.
2. At the bottom click on Contact us.
   
3. Enter the keyword Account Management and Billing in the What can we help you with? box.
   
4. On the next screen, scroll down to How would you like to connect with us section.
5. Choose Chat with us to initiate a discussion with a live agent.
   
6. Enter you account contact information then press Get a chat.
   

When using this option, make sure to enable pop-up windows. The chat box will appear at the bottom right section of your monitor, and an agent will be with you shortly after.

Reach out to us during our operations hours. You will see it here: Support hours and type.

Kindly update me on how it goes. I'll be right here if you need further assistance with QuickBooks Online. Have a nice day!

Hello!

I don't know if this matters, but the shrinkage is from 2020, not 2021. I unknowingly used the Inventory Shrinkage account when I was updating inventory quantities last year. How do I fix this on my P&L for my accountant?

Thank you for chiming back in on the thread, hosbrook41. I appreciate that you provided additional information to help get this matter resolved. I would suggest recreating the transaction using the correct account, so the wrong account is not affected. Once that is completed, you may need to reconcile the account. You can refer to this article for more information about reconciling in QuickBooks. I highly recommend that you speak with your accountant to see if an adjusting entry could be made to correct this problem. If you have any follow-up questions, please let us know below. My team and I will be on standby! I hope you enjoy the rest of your day.

I just looked at my 2022 Statement of Activity report and it shows over $24K worth of inventory shrinkage entries dated 01-30-2022. 

I have read through some of the community Q&A's on this subject and checked inventory adjustments.

I have not entered any inventory adjustments entries, so I am baffled to what I could have caused these.

Thank you for joining the thread, @ADNugent. I’ll share some insight about inventory shrinkage in QuickBooks Online.

QuickBooks creates the Inventory Shrinkage account automatically when you create an inventory adjustment. This is how QBO works, and it is a feature of QBO.

Let’s try checking the audit log to see who made changes to your inventory items. Here’s how:

1. Click the Gear icon and then select Audit log.
2. Ensure that the exact date, user, and events are sorted.
3.You can also click View to see the activity history.

It also records all your financial transactions in your chart of accounts, and events are available for two consecutive years.

I added this link on how to use reports to see your sales and inventory status in QuickBooks Online.

Alternatively, I'd recommend monitoring your bank account to see whether any transactions have had an impact on the shrinkage. If this is the case, you can erase them from your account because shrinkage cannot be used for any deposits or expenses. To see the steps, please open this article: Find, review, and edit transactions in account registers.

When you need more clarification, just hit the reply button. Have a wonderful day!