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Adjust your inventory

You can adjust the quantity, value, or the quantity and value of an inventory item.

When should I adjust inventory quantities or values?

Although QuickBooks automatically adjusts your inventory quantities after every purchase and sale, you may need to adjust them yourself from time to time. If the quantities change because of, say, fire, theft, or breakage, or if you want to manually disassemble inventory assembly items and return component parts to inventory, you need to adjust the quantity on hand for each inventory item affected.

When you adjust a quantity, QuickBooks assumes that the average cost of the item remains the same and adjusts the value accordingly. For example, if the average cost is $10 and you reduce the quantity by 2, QuickBooks reduces the value of the items on hand by $20.

You can also adjust the asset value of items in inventory because of such things as spoilage or changes in seasonal demand.

See also

I need to:

Adjust the quantity of an inventory item

What should I know before adjusting the quantity of an inventory assembly item?

Consider the following information before adjusting inventory assembly items:

  • Decreasing the quantity of an inventory assembly item may cause finalized inventory assembly builds to change to pending status. It's a good idea to run the pending builds report before and after making an inventory adjustment so you can see if any builds were affected.

  • Adjusting the quantity of an inventory assembly item does not affect the quantity of its components (neither inventory parts nor other inventory assembly items) in the Bill of Materials. If you want to disassemble an inventory assembly item and return its components to inventory, you'll need to decrease the inventory assembly item quantity and increase each component quantity accordingly.

    Other methods for disassembling an inventory assembly item and returning its components to inventory

To do this task

Note: If you track serial or lot numbers, QuickBooks needs to add or remove serial/lot numbers when you adjust inventory quantities. Therefore, you must assign serial or lot numbers to inventory items before adjusting the quantity on hand.

  1. Choose Vendors > Inventory Activities > Adjust Quantity/Value on Hand.

    Choose Inventory > Inventory Activities > Adjust Quantity/Value on Hand.

  2. Click the Adjustment Type drop-down arrow and select: Quantity.

  3. Enter the date of the adjustment.

  4. Click the Adjustment Account drop-down arrow and then click the account where you want to track inventory adjustments.

    Which account should I use?

    You may want to create a new account just for tracking inventory adjustments. You can use one account for all adjustments, or use an expense account for losses and shortages and an income account for gains. Consult your accountant if you aren't sure what type of account to use.

    If you're making adjustments to more than one item and need to assign the adjustments to different accounts, you'll need to create multiple adjustments—one for each account.

  5. Click the Inventory Site drop-down arrow and select the site to apply the adjustment to.

  6. (Optional) Enter a reference number.

  7. (Optional) If you want to assign this adjustment to a customer or job, click the Customer:Job drop-down arrow and then click a customer or job.

  8. (Optional) If you use class tracking, click the Class drop-down arrow and then click a class.

  9. Click in the item column to add items. You can also add multiple items.

    Save time by adding multiple items.

    1. Select the items you want to add to the transaction.

      • Search for items

        1. In the Find field, enter a search term.

        2. (Optional) Click the In drop-down arrow and select a specific field.

        3. Click the Search button.

        4. In the checkmark column, click to clear any items you don't want to add.

          Note: To clear your search results, click the Reset button.

      • Add all items

        To add all items to the transaction, click the Select All button at the bottom of the window.

      • Select items manually

        Click the checkmark column to select individual items from the list.

    2. Click the Add Selected Items button.

  10. Enter the New Quantity or the Qty Difference in the appropriate column.

    In the Qty Difference column, enter the difference between the quantity currently in QuickBooks and the actual quantity.

    For example, if you need to reduce the quantity by five, enter -5 as the difference.

  11. (Optional) Enter a memo in the Memo field to remind yourself later why you made this quantity adjustment.

  12. Save the adjustment.

Adjust the value of an inventory item

When should I adjust the value of an inventory item?

The value of your inventory directly affects your financial statements, so keeping the value of your inventory accurate helps ensure the accuracy of your financial statements. If the value of an inventory item changes due to such things as seasonal demand or spoilage, you'll need to decide if the change is significant enough to warrant a value adjustment.

To do this task

  1. Choose Vendors > Inventory Activities > Adjust Quantity/Value on Hand.

    Choose Inventory > Inventory Activities > Adjust Quantity/Value on Hand.

  2. Click the Adjustment Account drop-down arrow select Total Value or Quantity and Total Value.

  3. Enter the date of the adjustment.

  4. Click the Adjustment Account drop-down arrow and then click the account where you want to track inventory adjustments.

    Which account should I use?

    You may want to create a new account just for tracking inventory adjustments. Because inventory adjustments generally tend to reduce inventory value, you might want to create the new account as an expense account. However, if your inventory mostly increases in value over time, you might want to create an income account. Consult your accountant if you aren't sure what type of account to use.

    If you're making adjustments to more than one item and need to assign the adjustments to different accounts, you'll need to create multiple adjustments—one for each account.

  5. Click the Inventory Site drop-down arrow and select the site to apply the adjustment to.

    Important: If you are making a Total Value adjustment you can't select a site because value is calculated across all sites.

  6. (Optional) Enter a reference number.

  7. (Optional) If you want to assign this adjustment to a customer or job, click the Customer:Job drop-down arrow and then click a customer or job.

  8. (Optional) If you use class tracking, click the Class drop-down list and then click a class.

  9. Click in the Item column to add items. You can also add multiple items.

    Save time by adding multiple items.

    1. Select the items you want to add to the transaction.

      • Search for items

        1. In the Find field, enter a search term.

        2. (Optional) Click the In drop-down arrow and select a specific field.

        3. Click the Search button.

        4. In the checkmark column, click to clear any items you don't want to add.

          Note: To clear your search results, click the Reset button.

      • Add all items

        To add all items to the transaction, click the Select All button at the bottom of the window.

      • Select items manually

        Click the checkmark column to select individual items from the list.

    2. Click the Add Selected Items button.

  10. Select the Value Adjustment checkbox near the bottom of the Adjust Quantity/Value on Hand window. More...

    This adds the Current Value and New Value columns to the table of items. The amount displayed for an item in the Current Value column represents the total value for the entire quantity of that item currently in inventory. The value is calculated by multiplying the item's current average cost by the current quantity on hand. For example, if you have 15 fasteners on hand and their value is $30, the current average cost for the fastener item is $2 (15 x $2 = $30).

  11. For each item whose value you want to change, calculate the new value by multiplying the new individual item value by the current quantity on hand. More...

    This adds the Current Value and New Value columns to the table of items. The amount displayed for an item in the Current Value column represents the total value for the entire quantity of that item currently in inventory. The value is calculated by multiplying the item's current average cost by the current quantity on hand. For example, if you have 15 fasteners on hand and their value is $30, the current average cost for the fastener item is $2(15 x $2 = $30).

    If you want to change the value of the fastener item to $3, multiply the current quantity (15) by the new individual item value ($3) to come up with the new value ($45).

    Important: You can't select an inventory site when you are doing a value adjustment, because inventory value is calculated across all sites.

  12. (Optional) Enter a memo in the Memo field to remind yourself later why you made this value adjustment.

  13. Save the adjustment.

See also

KB ID# H_INVTRY_ADJUST_INVTRY
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