QuickBooks Inventory problems. QuickBooks Inventory discrepancies. QuickBooks Inventory how it works
  Follow us: Follow QBalance QuickBooks Help on Twitter Follow QBalance QuickBooks Help on FaceBook QuickBooks Help Blog

QB alance.com

Advanced QuickBooks Help QuickBooks Help from Advanced Certified QuickBooks Pro Advisors

QuickBooks help with Enteprise Solutions by QuickBooks Enterprise Gurus

  QuickBooks Help from Authorized Quickbooks Affiliates  

QuickBooks Help


We have been selected as one of the top QuickBooks Advisors for the last 3 years

QuickBooks Checks

Deposit Slips,

QuickBooks Software
QuickBooks 2018


 NEW: Invoice Forms
Perforated Payment Voucher

QuickBooks Invoice Forms

 Is your QuickBooks   running slower than an 3 legged tortoise?
  QuickBooks running slow? We can help

QuickBooks Help


Buy W2 & 1099

Buy QuickBooks W2 QuickBooks 1099 Tax Forms

QuickBooks Enterprise Software



QuickBooks Inventory Newsletter Volume 1

QuickBooks software training, support, and problem solving
Including strategies and information for a total small business solution
Accounting  ●  Tax  ●  Bookkeeping  ●  Office procedures

Why does the inventory valuation report differ from  inventory in the Balance Sheet?
Items can be entered using any of the following transaction types:
  • To increase inventory- bill, credit card, check, inventory adjustment.
  • To reduce inventory due to items sold- invoice, sales receipt, statement charges.
  • To decrease inventory - inventory adjustment, bill credits, credit card refund, credit memo.

An inventory item represent materials or parts you buy, track as inventory, and then resell.
To record the purchase of items, you use the "item tab" on the transaction. 

As you read this article,  reference to the item tab is in red and reference to the inventory item is in blue. They are not links

To record a purchase from a vendor for inventory, the quantity and inventory item is entered on the item tab of the transaction. Any of these transaction types, that have used the item tab and also have an  inventory item will appear on the inventory valuation report. The inventory valuation report will not include inactive items, so be sure to print all period end inventory valuation reports before inactivating them. Otherwise, you may find yourself looking at December 31st, last year statements after making inventory items inactive and scratching your head trying to figure out why your inventory valuation report no longer agrees. (Sidenote: All other reports will include inactive names and accounts as long as there were balances for the reporting period).

On the other hand, the balance sheet account inventory can include a much broader range of transactions. Not only will it include those same transactions found in the inventory valuation report but it will include transactions that have used the item tab with non-inventory items. Non-inventory items include service, non-inventory parts, and other charges. If during set-up of these non-inventory items, the account inventory was erroneously chosen as the posting account, any transactions using this item will appear in the balance sheet account inventory but not the inventory valuation report. The balance sheet will include items erroneously made inactive that still contained a quantity and a value, the valuation report will not.

Transactions that used the expense tab not the item tab with a posting account of inventory will appear in the balance sheet reports on inventory. But as previously mentioned, will be omitted from the inventory valuation report (no item tab used).

To discover the root of the differences between the two reports, produce the following report:

From the reports menu > Select Company & Financial >Select balance sheet standard report > drill down on the inventory asset account and change the dates to the period you are reviewing >from the report button bar, choose "type" from the "sort by" drop down box >also from the report button bar, click on modify > the lower left of the display tab has a selection window named columns; place an additional checkmark next to item (about 35th on the list of choices) > click OK.

Look for any of the following problems: Do you see any transactions missing an item name? These transactions did not use the "item tab" and will not appear on the inventory valuation report. You may discover that you used a transaction type that does not allow for entering "items" or "quantities". For example, journal entries do not have a field to enter an "inventory item" or "quantity" A second example would be a transaction entered directly into the checkbook register; there is no opportunity with this method to enter an "inventory item" or "quantity"

Do you see transaction types without an item, but when you drill down to the original transaction, you have correctly used the item tab and see that indeed, an inventory item was entered? The answer may be found in discovering what accounts were chosen during set-up of the item. Research these problem items,

From the list menu > choose items > highlight the inventory item in question > Ctrl+E to edit > look at the accounts selected. The Inventory account should not be used in either of these locations. QuickBooks handles posting to the account "inventory" behind the scenes. When the goods have been sold, QuickBooks needs to know how you would like to see the income reported (enter an income type account) and to what account you would like to see the cost of that sale reported (enter an expense or cost of goods sold type account).

Do you see inventory adjustment transactions without an item? When using the transaction type "inventory adjustment", QuickBooks handles the posting to the account "inventory" behind the scenes. Do not use the account "inventory" on these transactions,; instead, select an expense or cost of goods sold account.

Was an inventory item made inactive while it still had a quantity and value? The value will appear in the balance sheet inventory report but not on the valuation report.

If you need help making corrections, call or to discuss options and prices. We can solve many problems using remote access, telephone or e-mail support.

More worthwhile QuickBooks tips and tricks, information that can help your business, and more details about the QuickBooks
services we offer.

QuickBooks Training Home