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F
fmkport
May 21, 2026
Question

month end close and negative on hand inventory values

  • May 21, 2026
  • 1 reply
  • 8 views

I recently attempted to close month end but received an error message saying I was not able to close the month due to items in our inventory that had negative on hand values. This was not an issue for us in Desktop but is an issue in IES.  

 

Because of the nature of our business, we do have regular and consistent transactions where the sale is recorded a few days before the item is received into inventory ( we do a good deal of third party drop ships).  appreciate the warning that there are negative hand inventory amounts to but to prevent the month from being closed does not work for us. I could have 10 items that show a negative on hand inventory value of just $.10 and I still could not close the month ( Materiality ???). 

 

The suggestion from the Feedback desk was to do an inventory quantity adjustment at the end of every month and then reverse it the first day of the next month. This is not very efficient.

 

Has anyone else experienced this and does anyone have a suggestion for a better workaround?

1 reply

E
EmanE17QuickBooks Team
QuickBooks Team
May 21, 2026

To properly identify your options for addressing negative on-hand inventory values, I recommend working with an accounting professional. If you need one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed are QuickBooks certified and can provide valuable insights to drive your business's success.

 

Let us know if you need anything else.

F
fmkportAuthor
May 21, 2026

Thank you for your response and no offense intended, but as a CPA I am accounting professional. 

 

The issue is that due to the nature of our business, it is not uncommon to have inventory items go negative for short periods of time. For example ,we may have an item we offer for sale that we do not carry in inventory. A customer places on order on Friday and we invoice them creating a negative on hand inventory. The goods are delivered to the customer on Wednesday by a third party supplier at which point we enter to goods into our inventory thereby zeroing out the negative on hand. This is not unusual for sales transactions fulfilled by a third party shipper. 

 

The Intuit suggested workaround is to make an inventory adjustment for each of the items the last day of the month and then reverse it the first day of the following month. It works but is cumbersome and time consuming. 

 

The simple solution is to keep the warning at month end but let me override it if I know of extenuating circumstances or the variance is immaterial. 

J
JayCaeRQuickBooks Team
QuickBooks Team
May 21, 2026

You're right that allowing a controlled override for negative inventory warnings would be a more efficient solution, especially for businesses like yours that use third-party fulfillment.

 

While the current workflow is the best available option, I see how it can be time-consuming.

 

Your suggestion to enable an override feature is valuable. I encourage you to submit this Feedback to our product development team on your behalf, so they can thoroughly evaluate it for future product updates.

 

If you have  any other concerns about the program, please click the Reply button.

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