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Inventory Adjustment Question

Forum|Forum|3 years ago
January 3, 2023
1 reply
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Happy New Year!!!

Last year in July I ordered 50 posters to sell. The order was printed wrong with defects. I was not charged for them. Instead, the company just sent me a new batch of 50 posters corrected and printed well.

Before I got the good replacement posters order in, I had a client that needed to get some posters for an event he was doing, and did not mind that they were defective, so I sold him some to get him out of a bind. I didn't want to do this, but I also wanted to help him since he couldn't wait until the good order came in.

I never entered the bad posters into inventory because I am going to trash them and I did not get charged for them. They just sent me new ones later.

Now I have an inventory issue, because it shows that I sold more than the amount entered into inventory. I am off by 9 posters that client purchased when he purchased the bad posters from me.

Questions:

1. Do I enter the bad posters into inventory to fix this as a zero charge order?

and if YES, how do I make the rest ( 41 quantity ) bad one as damaged inventory to take them out of inventory ( except for the 9 bad ones that the client purchased ).

2. OR, do I just make an inventory adjustment to add the posters needed to fix my inventory count and not enter the bad batch of posters?

Thank you for your time!

Bill

QuickBooks Desktop

Best answer by Rainflurry

@Rainflurry , thank you!

When you say "If you want to put those 25 posters into inventory, you can enter a bill for 25 more at $0.00.",

This bill I am entering, is that another sales bill from the vendor of the posters? ( Like the way I am entering the vendor bill for the 9 posters @ $0.00/ea and dating it prior to 12-9 so that I can complete the invoice of 15 posters to and receive the payment. )?

I just enter another different bill that same way? Is that correct?

Thanks again!

@billhdz

You got it. Just enter another bill for 25 items of that particular poster at $0.00 each and QB will put 25 more into inventory and the bill (since it was entered at $0.00) will show as paid. I would date the bill as of the day you decided to put them into inventory.

Rainflurry

Level 11

@billhdz

Presumably, your QB inventory shows 9 fewer posters than you have on-hand, correct? If that's the case, I think the best solution is to create a bill from your vendor for 9 posters at $0.00/each. That will put 9 posters into inventory and will recalculate your average cost to include the 9 posters you received free of charge.

B

billhdzAuthor

@Rainflurry

Thanks for the reply.

1. If I do it this way, will any of the invoices I already created from poster sales get messed up?

How does Quickbooks handle those entered from the created bill from my vendor for posters at $0.00/each?

2. When Quickbooks recalculates the average cost to include the 9 posters when they are entered at $0.00/each, what does that do to the invoices or sales numbers?

3. Will doing an inventory adjustment instead something to consider?

Thanks!

Rainflurry

Level 11

@Rainflurry
Thanks for your help. I was out of town for a few days and just got back.

We are very new to selling posters. We started selling them at the end of 2021 and we are learning about inventory as we move along. Luckily, we only sell one poster design and quantities are very small until we get further ahead with other products. This makes it easier to handle inventory issues right now before we grow the poster business with more deigns. It also gives us the knowledge to handle all Inventory with Quickbooks as we add more products.

That being said, my wife and I wan into another issue.

When going thru all the bad posters that we were going to toss away, we found a few posters that are usable. It also looks like the vendor sent us a few extra ones in this pile other than the quantity we ordered. Maybe we can use them as giveaways for marketing purposes, etc. Maybe even for sale??? That would total to 25 leftover posters that we would have after zeroing the inventory with after entering the last invoice and payment. 25 posters that are not in QB inventory right now for the reasons stated above.

We are learning real quick that it doesn’t matter how many posters we order, we need to take the time to count them all after we receive the orders from the vendors. We were trusting the vendors and assumed that they would always send the correct amount. But we see that that’s not always the case. Mistakes can happen. At least they didn’t short our order. I don’t blame them. It has to be hard handling a lot of print orders. They also depend on computers, etc to do the orders.

In summary,
1. Quickbooks says we have 6.

2. We can enter a vendor bill for 9 posters @ $0.00/ea and date it prior to 12-9 so that we can complete the invoice of 15 posters to and receive the payment. ( 6+9 = 15 posters on that order ). This will zero the poster inventory for 2022 and we can start fresh when we get more posters to sell in 2023.

3. I am trying to decide what to do with the 25 posters that we found to be usable for selling, giveaways, promotional samples, etc. Maybe I should not sell any of these and just use them for giveaways, promotional samples, etc. This way we don’t mess up the inventory. Or maybe there is a way to enter them as inventory in case we want to sell them if needed in an emergency situation?

I don’t want to complicate things, I want to do what is easier and better for Quickbooks to keep good inventory so that we know what's going on with products. Any suggestions?

Hopefully, this will help other people in the future on this forum if they go thru a similar situation as mine when starting to use the inventory feature in QB and doing a search here.

Thanks!

@billhdz

If you want to put those 25 posters into inventory, you can enter a bill for 25 more at $0.00. Then, you can sell them on an invoice/sales receipt or, if you give them away, make an inventory quantity adjustment (Vendors > Inventory Activities > Adjust Quantity/Value on Hand) and choose your Marketing expense account under 'Adjustment Account'.

And, yes, you can never trust that the quantity you ordered will be the quantity received.

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