Need to get COGS to 0 after entering inventory incorrectly

Let’s work together to figure out what’s happening to your inventory and COGS accounts, lubyluanne@gmail. I’m here to provide 2 options you can perform to zero out your COGS account in QuickBooks Online.

You’re unable to edit the item and reduce its cost. The price that you see in the cost block is usually the most recent purchase price. This means that the amounts shown for each account in your reports are based on the transactions that you generated. Thus, updating the amount of your items doesn't post any changes with it.

To fix this, you can utilize inventory adjustments and set the quantity to 0. This way, you can deduct the majority of the charges from the items this year. If the whole cost of the item is not distributed equally across all the items, the excess will remain.

Another thing you can do is to create a journal entry that will zero out your COGS account. I’ll show you how:

1. Go to the +New button.
2. Select Journal Entry under OTHER.
3. Locate your COGS account.
4. Enter the adjusting amount you wanted to zero out.
5. Tap Save and close.

Here’s an article you can read to learn more about journal entry: Create a journal entry in QuickBooks Online. This contains a short video that’ll guide you through entering transactions so you can balance your books.

If you're unsure of which one to use, I highly suggest you contact your accountant. They’re able to provide an expert’s advice on correcting your inventory and COGS account. This way, we can ensure your books are accurate and you have reliable financial data.

You can bookmark these resources for ideas about how you can manage your reports and accounts: Reports and Accounting for QuickBooks Online.

Feel free to let me know if you require additional assistance with correcting your COGS account. It’ll be my pleasure to help you more. Stay safe.

For this reason, the different methods for identifying and valuing the beginning and ending inventory can have a significant impact on COGS.https://nextgen-patientportal.com/ 

I adjusted all inventory to 0 and edited all costs and sales prices to 0. I'm trying to do a journal entry to fix all effected accounts but I can't get it to balance to do the entry. I'm using entering the account balances I see under chart of accounts. My understanding was that Inventory Asset would balance against COGS? Are there additional accounts that would have been impacted?

lubyluanne@gmail 

If you are recording the cost of each item as $0, then how are you booking the item's cost as an expense to the company?  IMO, there's no reason you can't use COGS as your expense account for the items you give away.  Income will be accurately reflected whether you record the cost of the inventory sold as COGS or use another expense account.  If you track inventory, technically, you should expense it to COGS when it is sold - even if you sell it for $0.  That will keep your inventory quantity and value accurately. 

I have a bit of a similar issue I am trying to solve (using Enterprise) we operate a large farm. We use a number of chemicals that we purchase & need to inventory to know what we have in stock. However, we don't sell them so how would it be best to track the inventory amounts & usage without it going to income when we use it. Would it be set up as a part or non-inventory instead. I'm used to dealing with actually inventory & sales in our other companies & we have not tracked our chemical amounts until now but we really need to be able to within QB instead of just a spreadsheet. I thought you could also connect to a scanner & bar code items to take it out of inventory when using. 

Thanks for joining the Community and getting involved with this thread, TroyerGrowers.

To properly identify which way would be best to track inventory amounts and usage without it going to income when used, I'd recommend working with an accounting professional.

If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

1. Go to our Find a ProAdvisor page.
2. Use the City or ZIP search field to specify a location.
3. Select Find a ProAdvisor.
4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.
   
   

Once you've found an accountant, they can be contacted through their Send a message form:
 

1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
3. Select Send message.

In regard to working with a scanner and barcodes, you can use barcodes to make data entry faster and easier in QuickBooks. After assigning barcodes to your items, you'll be able to scan them whenever they're bought or sold. You can also scan barcodes to adjust the quantity of items on hand.

I'd recommend referring to our Set up & use barcode scanning article for detailed information about working with barcode scanning.

Please feel welcome to send a reply if there's any additional questions. Have a great Friday!

I have an accountant - thank you. They are not a quickbooks expert. I'm looking for someone familiar enough with QB to tell me which is the best way to set up our inventory. Or if it should just be a part. I'm sure there are many different ways the system can track the amount we have on hand that doesn't make it a saleable item but something used in our day to day business. Please tell me there is someone at Intuit can answer this question??

Proper categorization and recording of these transactions are crucial for maintaining accurate financial records and gaining valuable insights into your operational costs, Troyer. It's good to have you back again in the QuickBooks Community forum. I'm pleased to assist you in setting up a system to track your chemical purchases effectively.

Since selling these items isn't part of your business objectives, it’s essential to categorize your chemical purchases as non-inventory parts in QuickBooks. This classification allows you to accurately track and manage expenses associated with these chemicals without confusing them with inventory items intended for resale.

By designating these chemicals as non-inventory parts, you ensure these are recorded appropriately in your accounting system. When you buy these chemicals, these will be recorded as an expense. This categorization is essential as it helps you keep a clear and organized view of your operational costs, allowing for better financial planning and analysis.

These items will also not appear as your income as they aren't intended for resale. Instead, they will be under your expense account to accurately represent the costs incurred in acquiring them.

Additionally, with QuickBooks Desktop Enterprise, scanners, and barcodes are available to enhance your data entry process. To take advantage of this functionality, enable the Advanced Inventory feature. Once barcodes are assigned to your items, you can conveniently scan them during purchases or sales transactions. This capability also allows you to adjust inventory quantities simply by scanning the barcodes. To learn more about this feature, check out this article: Set up and use barcode scanning in QuickBooks Desktop.  

Finally, if there are specific details or topics you like me to elaborate on, let me know in the comments section below, Troyer. Whether about past discussions or other relevant topics, and I’ll be here to provide the information you need. My goal is to assist you in navigating through any complexities and to ensure all your questions are answered comprehensively.