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Negative inventory causes issues in your company data file

This article explains negative inventory - its possible causes as well as it effects on your company file. It also outlines steps to fix issues arising from negative inventory.

Negative inventory overview

Negative Inventory is caused by entering sales transactions before entering the corresponding purchase transactions, i.e., you sell inventory items that you do not have in stock.

How to view negative inventory

Negative Inventory can show up on your Balance Sheet but primarily it shows on the following reports:

Issues you may encounter




How to fix negative inventory
Reminders before attempting these solutions
  • Make one or more backups of your company data file without overwriting any previous backups. Keep these backups in a safe place.
  • Consult with your accounting professional to assure that these changes are legitimate.
  • It is not sufficient to adjust the current QOH to a positive value. You must eliminate each occurrence of negative QOH.
  • If there is extensive negative inventory that is not easily repaired, a better option may be to start a new data file.

How to prevent negative inventory

To prevent these issues from occurring: Do not sell inventory items until you have purchased them and entered the purchases into QuickBooks



KB ID# SLN40117
10/22/2016 6:30:06 AM
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