How do I adjust the cost of existing inventory? NOT the quantity...the unit cost/value.

Hi there, k-handler.

For now, we can only adjust the quantity of the inventories in QuickBooks Online and not the value or amount. Although, you can edit the previous adjustment to correct the details. Here's how:

1. Go the Search icon and select Advanced Search.
2. Click the drop-down list for All Transactions, then select Inventory Quantity Adjustment.
3. Select the appropriate filters from the ▼ drop-down list, then select Search.
4. Look for the adjustment you need to change and click on it.
5. Change the Adjustment date and the Inventory adjustment account if necessary.
   • To add inventory items, enter the details in the New adjustments section.
   • To make changes to the previous adjustment, edit the details in the Previous adjustments section.
6. Enter a note why you edited the adjustment in the Memo field.
7. Click Save and close.

Check out these articles for more details:

• Adjust Inventory Quantity On Hand In QuickBooks Online
• Edit An Inventory Quantity Adjustment

You can also choose to make a journal entry to change the amount of COGS. However, I'd recommend reaching out to your accountant for additional advice on this matter since it will affect your financial statement. 

Let me know if you need anything else. 

Thanks.  But that doesn't work. There is no issue with quantity.  The adjustment previously made was in the form of a fake vendor credit memo, not an inventory quantity adjustment.

If I go in to edit the starting value, but date it 1/1/2021 and indicate that there are 4 quantity on hand at $X (the correct value), charge the account "inventory adjustments" instead of opening equity,  will that eliminate all the activity related to this item prior to 1/1/2021?

And I AM THE ACCOUNTANT...A CPA with 40 years of experience.  I fully understand what needs to be done...just working with the limitations of QBO.  I really hate when the final answer from support is "contact your accountant." This isn't an accounting question..it's a QBO mechanics question.

There should be way to adjust inventory values for a specific inventory item.

I’ve got some information to share with you, @k-handler.

QuickBooks always considers the first items you purchase as the first items you sell. Also known as the FIFO process, where the value was taken from the oldest unsold item. In which the program will still utilize the old value when making transactions.

If it needs to adjust the COGs, then you’ll want to adjust the purchase transaction itself. Changing the starting value only affects the initial value of your inventory.

I have here resources that give you more information about inventory management in QuickBooks. It provides the right ways to handle your business essentials.

• What is FIFO and how is it used for inventory cost accounting?
• Impacts of inventory tracking on balance sheet and profit & loss reports
• Adjust inventory quantity on hand in QuickBooks Online

Message us here if you have additional inventory questions or concerns. We’re always here anytime to help. Keep safe.

Thanks, but you didn't read my post.  I'm fully aware of what FIFO is and that is why now, years after the bogus entry that was made in 2018, this issue is surfacing.  i.e QBO has been pulling the oldest stock first and finally has "gotten to" this entry that effectively adjusted the value of inventory and unit cost.  If you read my post, you'd see that the error was made in 2018...not going to reopen the books and restate the prior financial statements to correct the orginal transaction.

The answer is:  QBO does NOT have the capability of adjusting the value of existing inventory items...only the quantity.

The only solution is to:

1.  Delete all the sales estimates and invoices using this product code since the beginning of the year.

2. Then delete all inventory on hand at 1/1/2021, charging it to "inventory adjustments"

3. Then create a new temporary part number and add back the quantity on hand using the correct value at 1/1/2021, hopefully being able to book this to the same "inventory adjustments" account so they offset each other, leaving the net effect of the correction in this account.

4.  Then , recreate the estimates and recreate the invoices using this new temporary part number.

5.  this should result in 2021 P&L and inventory accounts being properly stated.

Now...what we have to figure out is how to go back to using the "real" part number for future purchases and sales. 

QBO is worthless when it comes to inventory management and accounting.  It's absurd that we have to spend hours on what should be a simple single entry.

Hello,

I’m also having problems.... I am trying to adjust the item value without adjusting the quantities.... I’m playing around and try to outsmart the system...

Have you thought generating an invoice with fictive client, just a day before the transaction you are having issue with, just to force the system to zero out the inventory with the wrong value, and then generating an expense using the item with quantity and correct value:

ex:

Client invoice or a sales receipt:

1 X $8540

Bill or expense:

item from inventory 1 X $1740

The inventory would have a sale at the old value and then a purchase putting the inventory back with the value you want.  Juste make a journal entry to adjust the GL account affected.

If you ever find a better way that works, please share!!! I have way too many adjustments to make...  My client is manufacturing products.... a nightmare with QBO.

k-handler you are correct! This is such a big problem. You can't just go back and adjust the purchase price as everyone is recommending. Once you close an accounting period it's closed, there is no going back and making changes. I was hoping to find a solution to this issue and I'm very disappointed to find that there isn't one.

I'm trying to find out if QBO now allows you to change the inventory carrying value of an item.  If so, how do you make the change?

I have an inventory item that cost $9.90 each and have 1000 units on hand.  That inventory item needs to be adjusted to the current market value of $6.00 each.

Can anyone tell me how I can make this adjustment in QBO?

Thanks

I too have this problem.  I have an inventory item that I was charged $12.50 for 100 items.  But I actually paid $7.95.

I was thinking of a few possible options as a solution just now.  One, handling the situation with a (fake) credit memo for $12.50/100 items; and then re-entering the expense with the new dollar amount $7.95/100 items, though this too would be fake.  This would give me the corrected amount.I would just have to remember this when it comes time to balance the bank statement.  This should result in my only changing my dollar amounts and have my inventory item a wash... 100 out and then 100 back in.  ($12.50 out, $7.95 back in leaving a difference of $4.55 which I then have to watch for on my bank statement.)

I hope this works.  I think it will.  I too am tired of the ask your accountant questions with I, an accountant too, am having issues with trying to figure out workarounds for Quickbooks inadequacies.

I'll add that I tired it another way with just one entry and it appears to have worked.

Since I needed my end result to be a negative number/credit.  (I was going from $12.50 to $7.95 resulting in a $4.55 credit.)  I did  credit memo.  I put in 100 items for $12.50.  I went down a line and put in the same inventory item only this time I put in a -100 items for $7.95.  This resulted in my total for the credit memo being $4.55.  And my inventory items being zero.  Now I just have to finish my credit memo steps and to step 2 of the bank deposit and then step 3 of pay bill.

This can also be done in the reverse/opposite with an expense.  If I needed to have my inventory item cost more I would make an expense.  I would put in a -100 at $7.95 and then on the next line I would put in +100 at $12.50.  This would leave me with +$4.55 at the bottom of the page.

I played around with things and I think all of these things solve my problem.