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Re: Invoicing my customers for inventory items is not decreasing my inventory and increasing my COGS as it should. Help?


Hi and thank you for your prompt response! By the way, when reading this post, please do not misinterpret my tone, as I realize that it may come across as argumentative and disrespectful. But I assure you that is not my intention. My intention is merely to explain my thinking and to seek to understand your statements. I appreciate and respect the fact that you clearly have a much greater understanding of QB than I do and I am truly seeking to learn from you. I honestly don't mean to seem like I am being difficult, but what you are describing seems so complicated to me. If it must be that way, then I will go through all of those steps, but the way I understood that QB would work seemed so simple.

I guess I am not understanding why I can't treat all of the miscellaneous materials on hand as one single inventory item and track it that way. If I can track inventory items individually, then why could I not track all of the items together, as though they were the same one item, being the only one item in my inventory?

Every time I enter a purchase for stock materials, I list the total cost on the items tab as "Stock/Inventory Materials" with no quantity specified, then QB increases my inventory asset account. Which is the desired outcome. (However, when selling the items, that is where I am not getting the desired outcome). That purchase of stock materials is not tracked to a specific job because obviously I don't know until it is used which jobs to track it to. This would be the same if I were a retail store selling multiple items that were tracked individually. I would take those items in, record the purchase and not track it to a customer until I sold the items. Then, when one of the items was sold it would be tracked to a particular customer and would show as a decrease in inventory and the income and COGS accounts would be correctly posted to, automatically by QB, as well, once I created the customer's invoice.

So if I am treating all miscellaneous materials on hand as one individual item and I am creating invoices to customers that show the sale of that one item with a dollar amount charged to the customer, but no quantity specified. Why would QB not treat that the same way? I just am failing to understand why those invoices to my customers are not decreasing the asset account by that amount and increasing the COGS account by that amount. It does debit accounts rec. and credit revenue, but it does not do the rest of the accounting that QB should automatically do for inventory items sold.

So ultimately, I guess I have two questions here, the first being, what is the problem with treating all of my misc. items as though they are one specific item, as long as my accountant and I both know what that actually represents? And the second question being, why is QB not doing the automatic accounting that I have been told it should do when items are sold from inventory? Is it because I am not specifying quantities sold?

Also in response to your statement that "As for Job Tracking, there is no job tracking a JE." I have found that the JE is actually the ONLY way that I CAN job track that cost, because QB is not tracking it from the sales invoice. Once I make the JE, then the cost shows up on the job costing reports for whichever job name I selected when making the JE. So, I am not sure what you mean when you say there is no job tracking a JE. Please see the photo below as it illustrates that the one and only "No item" included on that job costing report is the General Journal Entry that I made to reflect that decrease to inventory and increase to COGS, which in turn costed the value of the items used to that job.reports.png

Thank you for your patience and understanding with me!