Hi there, @rebecca24.
I hope you're day going well so far. You can change the Inventory item's Income and Expense account. This will allow the new Inventory items to go into the correct accounts and not the Opening Balance Equity account. The steps below will show you how to change the accounts:
4. Hit Save and Close.
It's that easy. I also suggest checking all your other Inventory items to make sure all their accounts are correct.
Please let me know if this gets you back to business. I'll keep an eye out for your response.
Thank You Anna. Each item is set up the correct way using the way you suggested below. QB creates this mess when I first enter a new item. Even though I use the correct accounts it still puts it into the Opening Balance Equity account. I do not chose this account QB does some where in the background. The attachment is not clear but I think you can see my problem..
I've checked the screenshot, Rebecca24. It made me understand your concern more.
Let me explain how Inventory asset works.
The inventory asset account is used to track the values of inventory on hand.
When you create a new item, QuickBooks will automatically create an opening balance. The reason for this is because it's the starting value of your items.
This just normal, and your items are set up correctly.
You can pull up the account's quick report. This way, you'll know how QuickBooks Online records a new inventory item. Here's how:
If you have additional questions, please feel free to tag me. I'm just around to help you.
When you create an inventory item, IF, if you say there is x-number on hand and a value - then that starting value posts to OBE - and that is correct.
Normally, you only create the inventory item with qty and cost IF you are starting a new QBO file from some previous accounting system
Other wise you create the inventory item with zero cost and zero qty. Then you enter a purchase for the item which will stock it with qty and cost.
I understand that. All of these items are new and not from another software system. But how do i get the balance out of the OBE? Because I have the same exact balance in Inventory Assets.
Welcome back @rebecca24,
When you create a new item, the system requires you to fill out the Initial quantity on hand field. The register then shows this as the Opening Balance Equity for the inventory.
Deleting this information from the Chart of Account is currently unavailable. We use this entry to track when you first started using inventory in QuickBooks Online.
Since this is a new product we're talking about, you can simply input 0 as its initial quantity, and leave it as is in the register. This way, the program will not record any increase in the Inventory Asset.
I've added some articles to help you with your inventory tracking in QBO:
If you need further help about this, let me know in the comment below. I'll be more than happy to provide further insights and help. Have a good one!
Typically when I am setting up a new item I am leaving the qty as 0 but when we were first setting up the inventory I did enter a qty and cost. That seems to be what has caused this balance in the BOE Acct. that we can't get rid off. Any suggestions?
Thanks for your prompt response, @rebecca24.
Currently, we're unable to offset the OBE. Once all initial account balances have been entered, the balance in the OBE account is moved to the normal equity accounts, such as common stock and retained earnings. Moving forward, it's no longer possible to access the OBE, means that access to the account is locked down.
In fact, once the data file is up and running, OBE should be 0 and never used again. OBE and those Opening Balance fields are provided by the programmers as DIY.
What's more important is that your ending balance in the register is correct.
You can also consult your accountant for more details about OBE.
I'll add this video article as your reference in tracking your inventory item: Set up and track your inventory in QuickBooks Online.
Please let me know if you have further questions and clarifications. I'm always here to guide you. Take care!