As an accountant or a business owner, you know how easy and efficient it is to handle your accountancy-related tasks using QuickBooks. However, just like with any other software, you may experience at least some minor issues when you using QuickBooks software. Some of the issues with QuickBooks can occur as a result of using its features improperly. One of those issues with QuickBooks is negative inventory.
In general, you are supposed to enter purchase transactions to QuickBooks data file before sales transactions. However, some individuals tend to enter sales transactions before their corresponding purchase transactions. Technically, that becomes a status that describes a situation where you sell inventory without having stock. In the real world, that is not possible at all. So, such wrongful data entry will end up causing QuickBooks negative inventory.
The effects of negative inventory
As a result of a negative inventory, you will experience at least one issue that is mentioned below. Well, if you continue to use QuickBooks data files with negative inventory, that will become unusable. Mentioned below are the possible effects associated with a negative inventory in a QB file.
- Incorrect costing on inventory items.
- The amounts of Profit and Loss and COGS (Cost of Goods Sold) will be incorrect.
- Your cash-basis balance sheet inventory amount will be incorrect.
- There will be errors in A/P reports.
- Bills for inventory purchases will show up on your income and expense reports.
- The inventory assemblies will show wrongful COGS on job costing reports.
- There is a good possibility of recurring data damage.
Fixing QuickBooks negative Quantity
Well, the most basic fix to this issue is to avoid selling inventory items until you purchase them. Then, you should enter those purchases to QuickBooks. You can start selling the inventory items once you have done that.
However, if you have multiple instances of negative inventory, the problem can be pretty complex. In that case, the best move is to get the assistance of an expert like us at E-Tech. We can handle all the issues related to QuickBooks data files and deliver professional results. You can contact an expert from our team member now and learn how flexible our services are.