Products: Retroactively updating Inventory Product Items on an invoice.

Max_Sonder · ‎January 27, 2020

Hi,

We have a client who mistakenly used the "Inventory" product type when creating products for invoices, which he then applied the cost of the product to the cost of goods sold account. This caused his cost of Goods sold account total to be just under $25,000 higher then it is in reality.

We corrected this for future invoices by setting the cost of the product to $0 for all current inventory items and instructed the client to use the "non-inventory" product type in the future. The Issue is that it has not updated the product retroactively, (We don't have the normal "update retroactive clients" button that would fix this problem here and now) and is still showing the $25k discrepancy. We would like to remove this so our client can see the most accurate books possible.

Thanks!

MariaSoledadG · ‎January 27, 2020

Hi Max_Sonder,

There are things to consider why the Cost of Goods Sold account total is showing an incorrect amount. First, in the absence of a bill, QuickBooks Online uses the Cost entered in the Product and Service information page.

I have attached a screenshot for your visual guide.

You'll want to leave the Cost field as blank for QuickBooks not to use or include it as reference amount.

Second, make sure you're using the Item details field when creating a bill for inventory and list each item, quantity and total cost. That stocks inventory as an asset, and when sold moves the cost form inventory asset to COGS.

Lastly, you'll want to create bills for any future inventory. Avoid manually adjusting inventory whenever there's an issue. Create the proper documents to reflect the transaction. If you create an inventory item with a starting quantity, QuickBooks shows no cost of goods unless you've entered a Cost value.

If you want to learn more about product and services type, please check this article for more information: Change Product and Service Types.

Let me know if there's anything else you need help with. I'll be right here to assist.

Max_Sonder · ‎January 29, 2020

Thanks MariasoledadG!

We have already reduced the inventory "cost" to zero for each product type, as shown below. Screenshot technically doesn't show all products because of how many there are, but each one is set to $0.00.

Our Issue is that even though they are all set to $0.00, they are still applying a COGS charge to the P & L account. The $23,556.40 amount in the Cost of Goods Sold is not correct, as it's not applied by expenses or other, legitimate, transactions. It is being generated by multiple invoices to the client's customers.

If there is a way to fix this, please let me know!

Thanks,

Max_Sonder

Sarah Bl · ‎January 29, 2020

Hello there, @Max_Sonder. Welcome back to the Community.

The Community has your back and is here to get you the solution your needing to get you back to business.

Let's get started on getting the value reduced:

Go to Sales, pick Product and Service.

Select Edit to the Inventory we are creating.

Pick Start Value and then hit Got it.

Here you'll enter the amount you are actually needing.

That's all there is to it. You'll now have everything back on track and no more hassle.

Please know I'm always here if you have any more questions or concerns. Happy Hump Day.

Topics

Training

Community

Resources

Products: Retroactively updating Inventory Product Items on an invoice.