23 Nov QuickBooks Tips & Tricks – Automatic Inventory Adjustments
QuickBooks Tips & Tricks – Automatic Inventory Adjustments
Inventory tracking using QuickBooks works very well, assuming that the unit of measure and cost of the item remains consistent and proper procedures are followed. When either is no longer true, adjustments may occur automatically.
Obviously without looking at the file it is difficult to guess what is happening in any specific situation, but here are a few issues to consider if strange amounts appear in the cost of goods sold and/or inventory asset accounts. Aside from the adjust/quantity value feature that can obviously make these types of changes, I have seen two other situations:
1. A new item is created and a quantity and value is entered at the bottom of the screen (this is relatively easy to trace since the “offset” of the entry shows in Opening Balance Equity). The proper procedure (except when setting up the file in the beginning) is to create the item, but enter the appropriate transaction (i.e. bill, check, credit card charge) for the initial purchase of the inventory.
2. Items are sold before they are purchased and/or the cost is changing significantly resulting in a situation where the software tries to make the average cost for the quantity on hand correct with the difference being coded to the cost account designated in the item. These issues are more difficult to track. To look for this specific issue, the journal report filtered for the transaction type of bill (or check or credit card charge, if that is how they purchase inventory) and an extra column for the item makes it a little easier since it is possible to scroll through the list looking for any purchase that includes the cost account as well as the inventory asset account.
List Limits Expanded
For most QuickBooks users, the list limit for the QuickBooks Pro and Premier products of 14,500 is sufficient. For some, however, that is not the case. We have been seeing increased list size for a variety of reasons. One of the most common is the increased number of customers as the result of web site sales. For version 6 and prior, the list limit was doubled for the Enterprise Solutions Product. New with version 7, the Enterprise Solutions limit has been removed.