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Intuit - QuickBooks Enterprise V15 - Prevent Negative Inventory Preference
Prevent Negative Inventory Preference 1
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Intuit - QuickBooks Enterprise V15 - Prevent Negative Inventory Preference
Prevent Negative Inventory Preference 2
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Intuit - QuickBooks Enterprise V15 - Negative Item Report
Negative Item Listing Report
New for 2015 QuickBooks Enterprise is a preference to prevent negative inventory quantities. QuickBooks has historically allowed you to sell more of an item than you had in stock. When this happened, the item's quantity went negative, and that had long-term ramifications on an item's average cost. With this new preference turned-on, QuickBooks will now prevent any transaction that would result in a negative quantity.
This new preference only blocks posting transactions such as invoices and sales receipts. It doesn't block non-posting transactions like sales orders.
In order to implement this new feature you must configure the appropriate preferences. There are separate preferences for “all inventory”, and for “inventory by site” (which applies only if you are using the Advanced Inventory add-on subscription feature) you can turn on based upon your specific needs and the inventory options you are using.
Either of these new inventory preferences can be turned on or off at any time because they have no lasting implications on your inventory. You can even turn these preferences on even if you currently have items with negative quantities.
To turn on the preference (for all inventory):
- From the Edit menu, choose Preferences, then Items and Inventory (See Figure 1)
- Check the “Warn if not enough inventory to sell” check-box
- Choose “Don’t allow negative quantities”
In addition to blocking items in your company that may go negative, you can choose to block transactions that would make items go negative in a site. You can choose one of these two preferences or both.
To turn on the block by site preference (if you have Advanced Inventory):
- From the Edit menu, choose Preferences, then Items and Inventory
- Click Advanced Inventory Settings
- Select the “Multiple Inventory Sites is enabled” check-box (See Figure 2)
- Select “Warn or block per site if not enough inventory to sell”
- Select “Block”
Finding your negative quantity items
Intuit has provided a new Negative Item Listing Report to enable you to see which of your items currently have negative quantities. This report shows all inventory items and inventory assemblies with negative quantities. (See Figure 3) Once you are aware of the items with negative quantities you can create transactions or make inventory adjustments to raise the quantities back to positive levels. You can perform this type of cleanup at any time, you are not required to do it before turning on the new preferences.
To run the Negative Item Listing report, choose Reports > Inventory > Negative Item Listing.
Testing, conclusions and how to get training on the new feature:
In my own testing of these new features in a pre-release copy of QuickBooks Enterprise V15, the preferences worked exactly as expected. When these preferences are activated, they do not allow any items with positive quantities to go negative, but they do not prevent items that already have negative quantities from going even more negative. The new report was extremely helpful in finding items with negative quantities. While there could be some slight differences or updates to these new features by the time QuickBooks 2015 is actually released, I suspect that they will work pretty much as I have described them here.
The problems of negative inventory are extensive, serious issues arise with the way QuickBooks computes ‘average cost’ when any inventory item goes negative. While there will obviously be individuals who object to the inability to ‘sell negative’, they have the choice NOT to make use of this preference. Some people will say, "we should not be prevented from selling something we actually have ‘in-hand’ just because QuickBooks thinks the item has no inventory." Of course that just goes to show how easy it is to make inventory mistakes, and the old adage ‘two wrongs, don’t make a right’ should come into play.
The key to inventory control and proper accounting for inventory rests in rigid adherence to inventory management procedures. In my way of thinking this new preference is one of the best feature changes Intuit has made from an ‘accounting’ standpoint in a very long time, and it should go a long way in preventing inventory issues and ensuring inventory accuracy from both a quantity and valuation standpoint.
While Intuit will start releasing 2015 versions of QuickBooks to QuickBooks ProAdvisors this week, your first opportunity to really see and receive training on this new feature will be at the Intuit QuickBooks Accounting Virtual Conference to be held on September 22 and 23, 2014. See the website for more information or register here.