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How to switch from another method of tracking multiple inventory sites

You may currently use a different method (with QuickBooks or different software) to track multiple inventory sites. Before you use multiple inventory sites, you need to ensure that your inventory numbers are correct so you can easily transition to using Advanced Inventory.

How do you switch from your method? Find your current method in the following list and expand the topic to see detailed instructions. If you don't see your method, look at "You use another method."

You track inventory at multiple sites outside of QuickBooks (for example, in Excel or different software)

With this method, you use different software to track how much inventory you have at each site.

To switch to the Advanced Inventory method:

  1. Using your other software, run a report to identify the quantity on hand at each site

  2. If you don't have your inventory items set up in QuickBooks, learn how to set up inventory.

You create separate items (subitems, or assemblies) for each site.

With this method, you use a naming method or structure to distinguish between items at different sites. For example, if you have 3 warehouses, you use 3 items to represent the same item located at each warehouse.

Here's an example. You sell the same widget that you store at three warehouses. To track this in QuickBooks, you set up a different item for each warehouse. Below is a screen capture that shows how you track Widget 1.

item list workaround

If you use this method, follow these steps to switch to the Advanced Inventory method:

Important: These steps are complicated and require good working knowledge of QuickBooks. Consider getting help from a QuickBooks ProAdvisor or your accounting professional.

  1. Calculate the quantity on hand (QOH) for each item at each site. You should also know the global QOH (the total quantity across all sites). Write these numbers down or print a report from QuickBooks.

  2. "Clean up" your item list. The goal is to have only one item on the list for each item you sell.

    1. Decide which items to use in the future. Remember that you only need one item in QuickBooks. In the example above, suppose you choose WH1 Widget 1.

    2. Adjust the quantities to zero for the redundant items you won't use. Then make the corresponding increase for the item that you will use. In the example:

      • Decrease the QOH for WH2 Widget 1 from 20 to 0.

      • Decrease the QOH for WH3 Widget 1 from 40 to 0.

      • Increase the QOH for WH1 Widget 1 from 100 to 160.

      Note: After making all adjustments, the net effect on the adjustment account should be zero. However, if each item that represents the same item at different locations has different average costs, the net effect won't be zero. There are 2 ways to handle this problem. If:

      1. the value differences are small:

        Talk to your accounting professional. If the value differences are small create a special inventory adjustment account (we suggest an expense account such as, Convert to Advanced Inventory) for this transaction, and make your adjustment. Then have your accounting professional write off this amount.

      2. the value differences are significant:

        • Adjust the quantity for the redundant items (WH2 Widget1 and WH3 Widget1 in the example above) to 0. Note the value of these adjustments for the next step.

        • Increase the quantity of the item you are keeping by the quantities you reduced in the step above.

        • You must also increase the value of the adjustment by the amount you noted in the step above. We recommend you follow these step-by-step instructions to ensure accuracy.

          1. Choose Inventory Activities > Adjust Quantity/Value On Hand.

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

          3. Click the Adjustment Account drop-down arrow and select the account you normally use.

          4. Click the Inventory Site drop-down arrow and select the inventory site you selected as your default when you turned Advanced Inventory on.

          5. Click the Add Multiple Items button.

          6. Select the items that represent the same item across multiple sites.

          7. Note the quantities of the redundant items (the ones you're not keeping), and enter 0 in the New Quantity column.

          8. Calculate the sum of the Qty Differences for all these redundant items.

          9. In the row that contains the item you are keeping, add the quantity from step 7 in the New Quantity column (as a positive number). To save time, place your cursor in the field and use your keyboard to add the numbers together.

          10. In the New Value column, set all values to 0.

          11. Note the Total Value of Adjustment amount in the bottom right of the window.

          12. In the row that contains the item you are keeping, enter the amount you noted in step 11 in the New Value column. The Total Value of Adjustment should now be zero.

          13. Click Save & New and repeat these steps for the next set of items.

    3. Hide (make inactive) the redundant items you won't use (in this example, WH2 Widget 2 and WH3 Widget 3).

      Important: You can also merge redundant items. However, if you merge items, you lose any historical information about sites/locations.

  3. Rename the remaining items to remove any reference to the site (in the example, remove "WH1" so the item is now called Widget1.

You use class tracking to track inventory sites/locations

With this method, you use classes to represent each site or location. Then you classify inventory purchase and sales transactions.

Switching from this method is easy. Simply stop using this method, and follow these steps:

  1. Calculate the quantity on hand (QOH) at each site.

  2. "Clean up" your item list:

    1. You should have one inventory part or assembly part item set up in QuickBooks to match each inventory part you buy or sell.

    2. This inventory part should accurately reflect the global (across all sites) QOH for that item.

Important: Advanced Inventory doesn't classify income and expenses. It only tracks inventory. You should still use class tracking to classify noninventory-related income and expenses at different locations.

You use another method

If you used a different method to track multiple inventory sites, be sure to:

  1. Figure out the quantity on hand (QOH) at each site.

  2. (Optional) If your current method uses an item list, you must first clean up your item list:

    1. You should have one inventory part or assembly part item set up in QuickBooks to match each inventory part you buy or sell.

    2. This inventory part should accurately reflect the global (across all sites) QOH for that item.

See also

KB ID# H_MULTI_INVENTORYSITE_CONVERT_WORKAROUND
9/26/2016 6:54:35 AM
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