In recent months, I have noticed several new clients had a HUGE number of inventory adjustments. Some even had a couple dozen a day. Large numbers of inventory adjustments are a warning sign that this feature is not being used correctly or that there is an internal control issue.
Inventory adjustments are used to correct quantities on hand, value, and/or Lot/Serial numbers. Usually inventory adjustments are made after a full physical inventory or cycle counts. If numerous errors are detected during the counting of inventory, it’s possible that transactions are not entered properly, or it may be a sign of internal control issues, or theft.
Inventory adjustments should not be used to create assemblies or transfer inventory from one site to another.
If you create inventory assembly items you can build assemblies. Using this feature in Pro, Premier, and Enterprise finished goods are added to inventory and the raw materials used to make the finished goods are subtracted from inventory.
If you have multiple warehouses, using Advanced Inventory on QuickBooks Enterprise gives the user an option to transfer inventory without affecting the value or lot/serial number.
If you have any questions or need assistance, please let me know.
Ilene will be speaking that the Intuit Conference QuickBooks Connect in San Jose, California, Monday October 20, 2014 she will be presenting Mastering QuickBooks Inventory in Pro and Premier. This session will highlight the inventory features and strategies that Ilene uses when working with client to create an efficient workflow and accurate reports. The session complete description is:
Managing Inventory can be quite complicated in any business! QuickBooks has features and tools that will help non-accountants manage the process. This course covers inventory concepts to help you understand the process and then introduces features and tools to purchase inventory, sell Inventory Parts, and enter Inventory adjustments.
Management should also understand the concepts, and use the tools provided, review reports, and be an active participant in the process to enhance internal controls. For this reason, we will also discuss reports, the reconciliation process, and an evaluation tool to easily identify errors and issues.
There are various versions of QuickBooks and we will discuss the inventory features that are available in QuickBooks Pro, QuickBooks Premier, and QuickBooks Accountant version so that the user can assess their needs and purchase or upgrade to the version that is best suited for their Inventory needs.