Quickbooks Online – Inventory Adjustments
I work for a fuel distributor and both the company and myself are new to Quickbooks online. As a gas distributor, different types of gas products are purchased and then resold to customers (gas stations, companies, etc.). Gas prices (cost of goods) varies almost on a daily basis as does the customer resale price. When entering a days purchase of gas products from refineries I am entering each daily purchase by gas type as an individual inventory item. I input my initial quantity and cost of goods value (price paid per gallon that day) but leave sales value as $0.00 as this will vary per customer per date of purchase/rate of gas on that day. As gas continues to be purchased from refineries I input each date/type of gas/gallons purchased/price per gallon into QuickBooks as a new inventory item (giving it a distinct separate name by including purchase date on the description). It is important that as we invoice the customer for the gas they purchased that the inventory adjustment goes against the “oldest” inventory (i.e. gas purchased a week ago versus gas purchased yesterday) until it is depleted and then the next group of purchases goes against the gas purchased after that old inventory…in essence a FIFO situation which QuickBooks online isn’t set up for. My thought is as I enter each daily gas purchase by category to make these entries “inactive” until the first lot of gas is depleted and then make the next sequential date lot of gas active to that invoices now draw from that inventory, and continue to do it this way. BUT when I make anything inactive the quantity on hand goes back to zero. I just can’t figure a workaround and spoke w/Intuit and they seemed baffled as well. Thank you!
Hi Kathy, this is a great question.
However, I am a bit perplexed by it because to my knowledge QuickBooks Online does calculate inventory using the FIFO method. In fact, it is the only inventory method used in QBO. Are you sure that you are using QuickBooks Online and not QuickBooks desktop? If you’re using QuickBooks desktop then that would make sense because it is only capable of doing average cost method. At any rate, if you can’t get the software to work the way you want it to, I recommend that you research some of the apps that integrate with QuickBooks. There are several great inventory apps like Fishbowl that are able to do extensive inventory tracking. I’ve included a link to the QuickBooks apps page below:
Best of luck,
Crystalynn Shelton, CPA