Keep in mind that adjustments should be entered in the Quantity column field only; in other words, enter the quantity by which your inventory has changed, not the actual quantity of your inventory. For example, if your actual quantity is 100 items, but your AccountEdge records show that your quantity is 125 items, enter a quantity of -25 in the Quantity column.
The entry you make in the Account field of the Inventory Adjustments window depends on the type of adjustment you’re making. Here are a few typical situations; choose the option that most closely matches your situation:
Warning: Be very careful choosing the account to enter in the Account column!
If you choose Option A, B or C in the list below, keep in mind that the item’s inventory asset account’s value will change when you record this transaction. This is probably the most common entry to make in this type of inventory adjustment.
If you choose Option D, however, the inventory asset account’s value will not change. In most cases, you will want the value of the inventory asset account to change, so be very sure you want the account’s value to remain the same before you enter that account in the Account column.
Option A: If the items were lost or stolen
Enter the account you usually use to track loss. In this situation, most businesses use an expense account called “Shrinkage,” or a similar name, to track this type of loss.
Option B: If you didn’t record an item invoice when you sold the item
Enter the account you usually use to track the cost of sales for this item. If you’re not sure what this account is, display this item in the Item Information window, then check the Cost of Sales Account field; the entry in that field is the account you should enter in the Account column.
Option C: If you didn’t record an item purchase order when you purchased the item
Option D: If you’re fixing an error you made when you entered your original item count when you set up AccountEdge
If you made a mistake when you first entered your item information into AccountEdge, use this item’s inventory asset account. If you’re not sure what this account is, display this item in the Item Information window, then check the Asset Account for Item Inventory field; the entry in that field is the account you should enter in the Account column.
Click below for the step-by-step procedures:
Identify the inventory adjustment
Enter the details of the inventory adjustment
Choose what you want to do with the transaction
Counting inventory items
Once in a while, you may experience discrepancies between the actual quantity of items you have in stock and your AccountEdge records of those quantities. When such a situation exists for many items, it can take a great deal of time to enter individual inventory adjustments for each discrepancy.
Fortunately, however, the Count Inventory window will speed the process of updating the quantities of many items for you. By using this window, you can quickly create one inventory adjustment for all the items whose quantities you need to change.
Each inventory adjustment you make must be allocated to a specific account so your accounting records accurately reflect the reasons why your inventory needed adjusting. For example, many businesses use one account -- often called “Shrinkage” -- to track natural loss or theft of their items.
Warning: If you’re setting up an item or many items at this time
If you’re setting up an item at this time, the procedure for recording your items’ initial quantities and values in AccountEdge is slightly different than what is described in this procedure. See Enter the item’s opening quantity and value for more information.
Click below for the step-by-step procedure:
To count your inventory items
Adjusting item quantities and unit costs
If your AccountEdge record of an item’s quantity is incorrect but the item’s total value is correct, you can enter a special type of inventory adjustment to change the item’s quantity and unit cost without changing the total value of the item.
If you want to reduce the inventory of the item, be sure to enter a negative number.
For example, if your AccountEdge records show 10 units on hand, and you want to change it to 15, enter 5 in the Quantity column. Or, if your AccountEdge records show 10 units on hand and you want to change it to 8, enter -2 in the Quantity column.
Warning: This transaction won’t affect the Inventory Journal
Keep in mind that the transaction you create using these steps will not have a dollar amount assigned to it. As a result, no entry will be made in the Inventory Journal. In effect, you won’t be able to find this transaction again in the future.
Click below for the step-by-step procedures:
To adjust an item’s quantity and unit cost
Adjusting item total values and unit costs
If your AccountEdge record of an item’s total value or unit cost is incorrect but the item’s quantity is correct, you can enter a special type of inventory adjustment to change the item’s total value and unit cost without changing the quantity of the item.
If you’re reducing the item’s unit cost and total value, be sure to enter the amount as a negative amount.
For example, say the total value of all your gadgets is $50 and you want to change that total value to $40. In the Amount column, you’d enter -$10.
Another example: Say you have 10 gadgets with a unit cost of $10 each. Your total item value is $100 (10 units multiplied by $10). Now, say you want to change the unit cost to $8 each. First, multiply the quantity of units (10) by the new unit cost (8). The eventual total item value you want is $80 (10 units multiplied by $8). To determine the amount of the adjustment, subtract the current total item value ($100) from the total item value you want to have ($80); this results in a -$20 adjustment amount. You’d then enter -$20 in the Amount column.
Click below for the step-by-step procedure:
To adjust an item’s total value and unit cost
Finding inventory adjustments
Inventory adjustments are a bit different than other types of AccountEdge transactions, such as sales and checks, in that the transactions you create can be reviewed only in the Transaction Journal window.
Click below for the step-by-step procedure:
To find an inventory adjustment
Changing inventory adjustments
Unlike other types of transactions in AccountEdge, once an inventoried adjustment is recorded, you can’t change it.
If you’ve entered an inventoried adjustment that you need to change, you can do one of two things:
- Enter a new inventory adjustment that corrects the incorrect adjustment. For example, if you entered an adjustment of 20 gadgets but needed an adjustment of 200 gadgets instead, you could create a new inventory adjustment of 180 gadgets to make up the difference.
- Enter a new inventory adjustment that completely cancels the effects of the incorrect adjustment, then enter another new inventory adjustment with the correct adjustment amounts. For example, if you entered an adjustment of 20 gadgets but needed an adjustment of 200 gadgets instead, you could first create a new inventory adjustment of -20 gadgets to cancel the incorrect adjustment, then you could create another new inventory adjustment of 200 gadgets to correctly record the adjustment.
Removing and reversing inventory adjustments
Unlike other types of transactions in AccountEdge, once an inventoried adjustment is recorded, you can’t remove or reverse it.
However, if you need to remove the effects of an inventoried adjustment from your AccountEdge records, you can enter a new inventory adjustment that completely cancels the incorrect adjustment. For example, if the adjustment you want to remove is for an increase of 20 gadgets, create a new inventory adjustment of -20 gadgets to cancel the incorrect adjustment.
Inventory Adjustments Overview