Brandon, MB -- (SBWIRE) -- 10/04/2019 -- Negative Quantity on Hand (QOH) or Negative Inventory in a QuickBooks data file occurs when you sell items you do not have in stock. This could either be by entering sales transactions before entering purchase transactions – resulting in the Quantity on Hand being negative when you sell the item.
Negative Quantity on Hand shows up on your balance sheet, but will mainly show on the Inventory Valuation Detail report with negative numbers in the Quantity on Hand (QOH) column. When you sell items and are not keen on receiving items, QOH can go negative.
According to John Rocha, QuickBooks Repair Pro's Technical Service Manager, this can also be caused due to employee negligence. "Operators sometimes neglect to enter Item Receipts, hence QuickBooks cannot calculate an average cost-of-goods-sold (COGS) when it's sold if there is negative quantity," he said.
Issues that can arise due to Negative Inventory are Inventory item has no average cost, incorrect Cost of Goods Sold (COGS), Vendor reports have Errors, incorrect COGS in Inventory Assemblies on job costing reports and balance sheet Out of Balance Error.
The simplest way to avoid this is by making sure that this inventory preference is turned on. This would alert you if you try to sell something you don't have. If at all you find yourself in a situation where you must sell something before it is received or billed, you can use one of the non-posting transactions to generate your documents for the customer.
You can also withhold permissions, which is the easiest way to prevent employees from making mistakes. Setting the date lock allows you to prevent users from entering transactions that they perhaps forgot to enter before month-end, and posting pre-dated Item Receipts and Invoices.
QuickBooks Repair Pro offers a repair service to fix all instances of negative inventory in the file. The service will analyze your source data file to identify the items and dates the quantity on hand (QOH) went negative and then fix all occurrences of negative inventory. The repaired file will not have negative inventory and will verify correctly in QuickBooks. There may be a change to the COGS and Inventory Asset account balances after the repair. There will also be a change to the Opening Balance Equity account that will be used to add the inventory adjustments. Your bookkeeper will need to add adjusting journal entries after the repair.
For more information on this service, visit https://quickbooksrepairpro.com/Quickbooks-Negative-Inventory-Fix.aspx
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