QuickBooks Online inventory not matching the warehouse count

Check the comparison before you chase the difference

Before you decide that your QuickBooks Online inventory is not matching the warehouse, check that you compared like with like. QuickBooks does not track inventory by location within a warehouse, and Plus and Advanced keep one quantity on hand per item. A count by location therefore has to be summed per item before it can be compared with a book number. Comparing a count by location with one book number can itself produce an apparent difference.

Here is one item in one warehouse. Item 4417 sits in three locations: 40 in aisle 3 rack B, 25 in the overflow zone and 6 in the returns zone. Your count sheets show three lines for it, and the books show one quantity, say 75. The counted total is 71, so the real difference is 4 units. If you compared only the first line with 75, you would see a shortage of 35 units that does not exist.

The hand reconcile is to sum by item, compare with the books, recount and adjust. QuickBooks Online inventory limitations for warehouses, explained walks through it. The ordinary reasons a counted total and a book number differ are in the quantity on hand glossary page. This guide adds the entries to check on the QuickBooks side and an order for sorting each difference.

Entries to check on the QuickBooks side

Start with what Intuit says about negative inventory. Intuit lists these causes: you sold more than you had. You did not enter all purchase orders. You miscounted your physical inventory. The quantity from the vendor did not match the purchase order. You did not convert purchase orders to bills. Intuit gives that list for negative inventory, so use it as a place to look and not as the full list of reasons a book number is wrong.

Intuit defines negative inventory as a quantity on hand below zero, and says you can accidentally oversell products in QuickBooks Online. It adds that QuickBooks only counts items as inventory after you create a bill. If an item has a purchase order that was never turned into a bill, look there first.

Check the as of date on each item as well. Intuit says the as of date on a new item is the starting point, and QuickBooks will not count sales or purchases from before it.

Be careful with the export you use as your book number. Intuit's note inside the exported Products and services list says that Quantity on Hand is calculated at the time you export, and may not match the list if you have adjustments dated in the future. Export the list when the count starts and note the date, so you know which moment each book number belongs to.

Check the lock date before you correct an entry. If a transaction is dated on or before the lock date, Intuit says QuickBooks gives a warning or asks for a password, depending on your settings.

Sort each difference before you adjust anything

Work through each difference in this order. Each step takes one answer, and you adjust only after the last one.

1. Confirm the book number you compared against was recorded at the count cutoff. Write down the date and time the count started, and keep the Products and services export from that moment next to your count sheets.
2. Confirm the item was counted in every location it sits in. Add up the locations for the item, then compare that one total with the book number. A location that was skipped makes the counted total too low.
3. Look for a transaction that moved the book number. A receipt or a sale dated before the cutoff but entered after it is not an error: the book number you recorded at the cutoff did not include it, so add a late-entered receipt to that number by hand and subtract a late-entered sale. A purchase order that was never turned into a bill, or an entry that was never made or was made with the wrong date, is a correction to make in QuickBooks before you go on to step 4.
4. Recount the locations behind the item, and adjust only if the difference is still there.

Steps 1 and 2 are process checks that need no change in QuickBooks, and step 3 changes QuickBooks only for an entry that was missing or wrong. Intuit describes the Inventory Valuation Detail as your transactions for each inventory item, and how they affect quantity on hand, value and cost. Intuit also describes the Inventory Valuation Summary as the quantity on hand, value and average cost for each product.

Intuit's negative inventory article has a physical inventory step. It has you print a Physical Inventory Worksheet and count. Then you compare the count with the Inventory Valuation Detail report. It says to adjust the quantity only after open purchase orders are converted to bills. Intuit describes the worksheet as your inventory items with space to enter your physical count, to compare with the quantity on hand in QuickBooks. The Physical Inventory Worksheet has no location column, so location stays on your own count sheets.

When inventory was lost or misplaced, Intuit says to reach out to an accountant, because there are special ways to handle those losses. If the recount confirms lost stock, read recording inventory shrinkage in QuickBooks. For locations, read QuickBooks inventory locations on count day. For the term, read inventory adjustment in QuickBooks. For the adjustment itself, read how to adjust inventory quantity in QuickBooks after a count. For the whole year-end count, read the year-end inventory count on QuickBooks, step by step.

Using Count on the differences you find

InventoryWare Count connects to QuickBooks Online and imports items with their QuickBooks quantity on hand, and the adjustment compares each counted total with that QuickBooks quantity. Count records every counted quantity against a location, and an item's counted total is summed across the plan's locations. That sum is what Count sets against the QuickBooks quantity.

The QuickBooks quantity Count compares against is the quantity from the last sync. A sync refreshes the QuickBooks quantity Count holds for each linked item. A sync that changes a QuickBooks quantity changes which lines are discrepancies and not which approvals stand.

The variance report lists each item with a variance: item number, description, the location or locations where it was counted, snapshot quantity, counted quantity, quantity variance, percent variance, cost impact when the plan has cost data, and who last counted it. The count history by location report shows, for each count, the count plan, the date counted and who counted, with the item's snapshot, counted and variance quantities.

Once the count plan is complete, Count can create one Inventory Quantity Adjustment in QuickBooks Online from the approved lines of items linked to a QuickBooks Online item, and this page calls that a send. Nothing posts while the count is running, and nothing posts until a manager approves the discrepancy; only approved lines post; nothing nobody counted is zeroed automatically; posting from a partial count is not available. An approved line drops out of the send if a later sync makes its counted total match the QuickBooks quantity, and a line that is still discrepant keeps its approval.

Our recommendation is to sync QuickBooks Online before the count starts and not again until the approved lines have been sent.

An item QuickBooks shows in stock that nobody counted is listed as a possible missing item, and it is sent as zero only after a manager approves it as zero. An item with no QuickBooks link is skipped at send.