How to Adjust Inventory Quantity and Value in QuickBooks Desktop

Before you start

• Decide what you're changing. Use a quantity adjustment when stock changes for any reason besides buying or selling. Breakage and a count that comes up short or over are typical.
• Use a value adjustment when the stock is worth less or more than QuickBooks shows, for example after spoilage or a seasonal drop in demand. Intuit suggests asking your accountant first.
• Have the count date and the counted quantity for each item. Reports > Inventory > Physical Inventory Worksheet gives you a list to count against.
• Adjusting an assembly changes the finished goods only, not its components. To unbuild an assembly and return its parts to stock, use Intuit's unbuild steps instead.

Step 1: Set up an inventory adjustment account

1. 1Go to Company > Chart of Accounts.
2. 2Open the Account menu and select New.
3. 3From Other Account Types, choose Cost of Goods Sold.
4. 4Name the account Inventory Adjustments, then select Save and Close.

You only do this once. Keeping adjustments in their own account makes them easy to find on the Profit and Loss.

Step 2: Enter the adjustment

1. 1Go to Vendors > Inventory Activities > Adjust Quantity/Value on Hand. If your menu bar has an Inventory menu, use Inventory > Adjust Quantity/Value on Hand.
2. 2In Adjustment Type, choose Quantity, Total Value, or Quantity and Total Value.
3. 3Set the Adjustment Date to the day of the count or the damage.
4. 4In Adjustment Account, choose the account from Step 1.
5. 5Enter a Reference No. You can also add a customer or job, or a class.
6. 6Select Find & Select Items, check the items to adjust, then select Add Selected Items.
7. 7For each item, enter the New Quantity, the New Value, or both.
8. 8Check the Qty Difference column. It should be negative for a loss and positive for a gain.
9. 9Select Save & Close.

Step 3: Check the result

1. 1Go to Reports > Inventory.
2. 2Run Inventory Valuation Summary to check value, or Inventory Stock Status by Item to check quantity.
3. 3Find the items you adjusted and confirm the new numbers.

Adjusting with Advanced Inventory in Enterprise

• If you track multiple sites, choose the Inventory Site on the adjustment so QuickBooks records the change at that site.
• If serial or lot numbers are on, choose Serial Number or Lot Number as the Adjustment Type to assign numbers to stock you already have.
• You can make serial or lot numbers mandatory on adjustments. QuickBooks then won't save one without them.
• Inventory > Cycle Count lets you count a group of items by site and bin instead of the whole warehouse. You can add up to 5,000 lines at a time, and QuickBooks splits them into cycle counts of 200 lines each.
• When a cycle count finds differences, select Batch Actions > Adjust Quantity/Value on Hand on the cycle count dashboard. QuickBooks opens an adjustment with every difference filled in.

If the numbers still look wrong

• Quantity went negative: Intuit says adjusting today's count back to positive isn't enough. Each point where stock went negative has to be fixed, often by dating the purchase before the sale.
• To find negative stock, run Reports > Inventory > Inventory Valuation Detail with Dates set to All. Enterprise 15.0 and later also has a Negative Item Listing report, which shows current negatives only.
• To stop it happening, Enterprise has a preference in Items & Inventory: Don't allow negative inventory quantities.
• Moving from one item per warehouse to inventory sites: use Quantity and Total Value adjustments to put the stock on the one item you keep.

Counts that are off after a delivery often trace back to receiving. See How to receive inventory against a purchase order, and How to track inventory by site for the warehouse cleanup.

Where QuickBooks Desktop leaves the work to you

• Someone has to count, compare the count with QuickBooks and key in each new number.
• An adjustment records the difference, not the cause. Theft, damage, a receiving mistake and a sale on the wrong item all look the same.
• Value adjustments change cost of goods sold and the balance sheet, so your accountant should see them.
• Short or over shipments become count differences when nobody checks deliveries against the purchase order.

How Logistify helps before the count

Logistify doesn't count stock or post adjustments. The Procurement Service follows up with suppliers on open purchase orders, captures confirmed dates and quantities, and routes exceptions such as a changed quantity to your team. Receiving then has a confirmed number to check each delivery against.