Inventory for most smaller retail stores should be taken at least every 6 months. The easiest way to do this is to make sure you are using bar codes for tracking your inventory items. This way you can use the
following inventory scanner and spend much less time (you can rent or purchase these from QB Services). For example, one store owner who had about 1000 items in her store finished the entire inventory in 3 hours!
However, if you want to do things the old fashioned way or simply use bar codes, then here is a step-by-step procedure for doing a manual inventory:
- In QuickBooks POS 2013, go to the inventory menu and click on, “Start Physical Inventory“.
- If you are only trying to take inventory for one vendor, department, combination of items, then select under the “View” drop-down, the create filter option and filter for those items you are wanting to count. This is especially nice if you are a larger department store and are only wanting to perform inventory on one section of the store at a time. Pay attention to the following CAUTIONS if you are only doing a partial inventory:
- Make sure that your count is complete! Sometimes a product from one department, may be in a completely different part of the store and you forget/don’t include that in your inventory count.
- DO NOT SELECT THE “Set all items not counted to zero” CHECKBOX! Otherwise, the rest of your store inventory will be wiped out!TIP: Save the filter you create for your inventory count so that when you have completed taking the inventory, you can use that filter again for faster data entry.
- From the “Print” drop-down menu, select, “PI Worksheet for current View” and print it out for your count. If it is too many pages, you may want to opt for the inventory scanner route.
- Close the “Physical Inventory” form and go count your inventory.
- When you are done with your count for the day, go back to the inventory menu again and click on “Start Physical Inventory“.
- If you saved your filter, use the “View” drop-down and select that filter again for faster data entry.
- Enter the amount of each item from your count worksheet in the “Counted” column.
- If you are counting all of inventory for your whole store and not just a single department, then after you are done entering the count for your items, if and only if this is your first count for the store, select the “Set all items not counted to zero” check box. This way you will zero out all of the items that are not counted yet. On the following count entries for the store, you will not want to check this box otherwise you will zero out the items you just entered!For example, say it’s Saturday and you wake up nice and early to go and count inventory (fun!). At noon, you haven’t finished the count but because you put a red ribbon on all the counted shelves/racks or whatever, you decide you are done for the day and want to complete the inventory counts the next weekend. Since this is your first count of the store for this inventory cycle, you will:
- Enter the items you counted
- Select the “Check all items not counted to zero” box so there is a check-mark in it.
- Click on, “Apply Changes to Inventory”.
- The reason for this is that when you do the QuickBooks POS Financial Exchange, QuickBooks POS will create a journal entry in your QuickBooks inventory asset account which will be reflecting the counted items and non-counted items. So what happens during the rest of the week? You will be selling items that were not counted and your inventory will go negative! That is correct, however, when you complete the count on the next weekend, you will be correcting the count on the remainder of your uncounted inventory items and QuickBooks will make the appropriate adjustments.
- So if you have an item with cost of $10 and a count of -5, and you count 5 items left in your store, QuickBooks will apply a correcting Journal Entry of 10 X Cost/item (so in this case it would be $100.00). In other words, you are not going to be off from a financial standpoint unless there were manual entries made directly to the QuickBooks inventory asset account being used.
- The reason for not simply using “Saving & Continue” is that your inventory count for that day is going to change with the sales and item receiving vouchers that are created during that week. So when you do complete the inventory, it will be off again by the weeks sales.
- In this scenario, it is better to apply the inventory count on the same day that the items were counted and have the inventory go negative for uncounted items during the week. Then, as you complete the rest of the inventory counts and apply them, you will be correcting all the uncounted inventory to the accurate counts. Note that during the time you are doing business, your balance sheet will be off until you complete your entire inventory count.
- Of course, the best option is to do a complete inventory and count all the items in your store when the store is not open. But who want’s to destroy your whole Saturday?
- When you enter inventory counts for the remaining portions of the inventory, make sure you DO NOT SELECT THE “Set all items not counted to zero” CHECKBOX! Otherwise you will negate the hard work you did on your first count.
NOTE: If your QuickBooks inventory asset account does not match your QuickBooks POS inventory valuation, then when you are completely done with taking inventory, you should create a journal entry in QuickBooks to your inventory account for the difference. Make sure to involve your CPA when doing this so they can make the necessary adjustments for your financial statements.
Please call QB Services if you have any questions!