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How to Adjust Inventory Quantity and Value in QuickBooks

· 3 min read
Debits

Introduction​

Accurate inventory management is crucial for any business that handles physical goods. QuickBooks provides tools to adjust inventory quantities and values to ensure your financial records reflect the actual stock levels. This guide outlines the steps to adjust inventory quantity and value in both QuickBooks Desktop and QuickBooks Online.

Adjusting Inventory in QuickBooks Desktop​

Step 1: Access the Inventory Adjustment Tool​

  1. Open QuickBooks Desktop: Launch QuickBooks and log in with your credentials.
  2. Navigate to Inventory Activities: Go to Vendors > Inventory Activities > Adjust Quantity/Value on Hand.

Step 2: Set Up the Inventory Adjustment​

  1. Select Adjustment Type: In the Adjust Quantity/Value on Hand window, choose whether you want to adjust Quantity, Total Value, or Both.
  2. Choose Adjustment Date: Set the date when the adjustment should take effect.
  3. Select the Adjustment Account: Choose an appropriate adjustment account (e.g., Inventory Shrinkage) to track the changes in inventory.

Step 3: Enter Inventory Details​

  1. Select Items: Choose the items you need to adjust from the list.
  2. Enter New Quantities or Values: Input the new quantity on hand or the new total value for each item.
  3. Review the Adjustment: Double-check the quantities and values to ensure accuracy.

Step 4: Save the Adjustment​

  1. Save the Adjustment: Click Save & Close to finalize the inventory adjustment.
  2. Review Inventory Reports: Go to Reports > Inventory > Inventory Valuation Summary to verify the adjustments are reflected in your inventory records.

Adjusting Inventory in QuickBooks Online​

Step 1: Access the Products and Services List​

  1. Open QuickBooks Online: Log in to QuickBooks Online with your credentials.
  2. Navigate to Sales: Go to Sales > Products and Services.

Step 2: Adjust Inventory Quantity​

  1. Find the Item: Locate the inventory item you want to adjust.
  2. Click on Adjust Quantity: In the Action column, select Adjust Quantity.
  3. Enter New Quantity: Input the new quantity on hand in the New Quantity field.
  4. Select Adjustment Account: Choose the adjustment account (e.g., Inventory Shrinkage).

Step 3: Adjust Inventory Value (if applicable)​

  1. Adjust Value: If you also need to adjust the value, you'll need to make a journal entry, as QuickBooks Online does not allow direct value adjustment through the Products and Services list.
  2. Create Journal Entry: Go to + New > Journal Entry.
  3. Enter Adjustment Details: Debit the inventory account and credit the relevant adjustment account with the value change.

Step 4: Save the Adjustment​

  1. Save the Changes: Click Save and close to apply the quantity adjustment.
  2. Verify Adjustments: Run the Inventory Valuation Summary report to ensure the changes are accurately reflected.

Best Practices for Inventory Adjustments​

  • Regular Audits: Conduct regular physical inventory counts to compare with QuickBooks records.
  • Document Adjustments: Always document reasons for inventory adjustments to maintain clear audit trails.
  • Review Reports: Regularly review inventory reports to detect discrepancies early.
  • Use Adjustment Accounts Wisely: Select appropriate accounts for adjustments to ensure accurate financial reporting.

Conclusion​

Adjusting inventory quantity and value in QuickBooks is a key task for maintaining accurate financial records and effective inventory management. By following the steps outlined in this guide, you can ensure that your inventory levels in QuickBooks accurately reflect your actual stock. Implementing best practices will further support your efforts in managing inventory effectively and maintaining the integrity of your financial data.