Comments on: QuickBooks Inventory Quantity and Value Adjustments

By: Charlie

Charlie — Thu, 17 May 2012 17:29:49 +0000

Just print the one transaction as you are doing it? No way to do that.

Print a register of the transactions? Use a “custom transaction detail report” filtered to Inventory Adjustments.

By: Jerry

Jerry — Thu, 17 May 2012 09:33:58 +0000

Charlie,

I found your article very useful.

I am having some questions with our transition to Quickbooks Enterprise 2012 from Quickbooks Pro 2011.

Is there a way to print out these adjustments, we have our account set as COGS and the customer job is saved as a inventory adjustment customer, but we would like to print this and cannot find a way to make either a template/form/use the input screen to do this without printscreen and powerpoint.

Is there a way to print this from the input screen upon completion of inputting the adjustment?

By: Charlie

Charlie — Thu, 19 Apr 2012 16:22:53 +0000

Celeste, there are different ways to find adjustments depending on what the circumstances are. Sawaya just asked how to change the date, the assumption is that the adjustment is already known. If you want to locate a particular adjustment to change it, you must have some clue that something should be changed? I’d have to know more about the circumstances to give a good answer.

If you right click on the item in the item list you can select the “QuickReport” for the item, which lists all the adjustments made. If you know a date (for example) you can just list the transactions for that date. Double click on the listed adjustment, that opens the transaction window that created the adjustment.

By: Celeste

Celeste — Thu, 19 Apr 2012 15:42:48 +0000

How do you locate the adjustment? i am having the hardest time finding an adjustment that i made that was incorrect.

By: Charlie

Charlie — Tue, 17 Apr 2012 21:18:46 +0000

Kathy, this is getting way more complicated than what should be worked out in comments in a blog. You really should find an advisor who can work with you directly, look at how you are setting things up. QuickBooks isn’t really suited for using inventory items to see “true profit or loss” on a job, that is usually done through the job costing features. Manipulating things in detail with value adjustments isn’t normally a good thing to do, in most situations, other than for occasional adjustments. I don’t have a good enough handle on what you are doing to give you good recommendations – and if your adjustments are affecting the P&L then I’m concerned that you are using accounts in the adjustments that aren’t the ones you would normally use in an adjustment in QB.

By: Kathy

Kathy — Tue, 17 Apr 2012 20:58:45 +0000

Thanks for your help and explaining that. From what you said, it sounds like I want to do a value adjustment as well as a quantity adjustment. I’ve always been scared to do that because I’ve heard that can mess up your financials. I want to change the average cost of the new item so that when I look at each job where that item is sold, I can see the true profit or loss on that job (I am moving from one item in my COGS to another item in the COGS). I played around with some test data after reading your response and it looked like if I didn’t do the value adjustment, any change in value on the quantity adjustment immediately changed the net income, but didn’t allow me to see what job caused the change. If I did the value adjustment as well, it didn’t change the net income at the time of the adjustment, but if I entered an invoice selling all the items, the net income was affected to the same degree. Does that sound right? I have been doing these changes by going to the original bill where item one was purchased, deducting the item from the invoice and adding the new item and paying the same amount that I did for item one so that the bill did not need to be recalculated (this takes a lot longer), and I believe it has the same effect as doing the value adjustment along with the quantity adjustment. Does that also sound right?

By: Charlie

Charlie — Mon, 16 Apr 2012 15:33:48 +0000

If you are doing a quantity-only adjustment, you are not changing the average cost of the item. You only change the total value. So if your first item has an average cost of $10.00, and you adjust it down by a quantity of 10, you are removing $100 of value from that item’s valuation and putting it into whatever account you specify in the transaction. Then, when you increase some other item by 10, you are increasing it’s total valuation by 10 times whatever the existing average cost is of that item. If that item has an average cost of $5.00, then you’ve added $50.00 to that item, takeing that cost from the account you specify.

If you use a value adjustment you can take $100 out of the first item and put $100 into the second item, so there isn’t a variance left over in some account, but that is going to change the average cost of the receiving item.

“net earnings” – that may or may not be changed, as that depends on what account you use when you do the transfer. Usually you are adjusting the inventory asset accounts, or possibly an inventory variance account. How this all affects your P&L is dependent on the accounts you use in the adjustments. Usually these are balance sheet accounts, but it is totally up to you as to what you use.

For “true profit”, that is a hard term to work with. Keep in mind that QuickBooks values inventory on the average cost method, not a specific identification method.

By: Kathy

Kathy — Mon, 16 Apr 2012 14:23:27 +0000

We are doing a quantity adjustment, moving several items with various costs to one item. I think what you are saying means that if we move a quantity of 10 of one item that cost $10 each, or $100 total, to a quantity of 10 of another item that costs $5 each, or $50 total, we will see a value adjustment of $50, but the average cost of the item we are moving it to will remain $5. Does that $50 increase our net earnings on the P&L at the time of the quantity adjustment?

If the above is correct, it presents a problem for us in job tracking. We would like to be able to move the 10 items to the new item and have the price of the new item adjust instead of stay the same so that we can look at the job we sell the item on and see our true profit on that job. Is there a way to do that?

By: Charlie

Charlie — Sun, 15 Apr 2012 23:09:34 +0000

Kathy, any kind of adjustment is going to make some kind of financial change,. You don’t mentionwhat adjustment type you are using.

If you do just a quantity change, then the total value of the receiving item will go up. You are moving a quantity, that has a value, from one item to the other. But the AVERAGE cost of the items won’t change.

If you do a value change (or quantity and value) then you are recalculating the average cost of the item. You can keep the total value the same, or change it as well.

By: Kathy

Kathy — Sat, 14 Apr 2012 20:57:14 +0000

Charlie, this is complicated but we bring items in and sometimes change them to different items (ex. item 123 is purchased for $2.00 a case, item 124 at $3.00, 125 at $1.00, and 126 at $4.00. At a later date we move all the items to item 999 to be sold as a variety pack). Most the time though items 123, 124, 125 and 126 are sold as their regular item numbers. We do an inventory adjustment entry and deduct all of items 123, 124, 125 and 126 and increase item 999 by the number of units being moved in. Why is it that the value adjusts instead of staying the same when we do that? Usually it increases. How does that affect our P&L? Because I don’t understand the value increase I will instead do the adjustment on the original receiving for the items (when I can, because that takes a lot longer).