How to Write-off Non-existent Inventory


This article outlines different methods that can be used to write-off non-existent inventory in scenarios where the financial reports are showing a company has more inventory than the actual stock held.


The recommended methods for writing-off non-existent inventory are:

  1. Using the Stock Count feature located at Inventory | Inventory Adjustment | Stock Count. This would require you to enter the current actual stock in the warehouse, and once the stock is adjusted, the balance should accordingly be adjusted correcting the anomaly.
  2. Create Cost Adjustment by navigating to Inventory | Inventory Adjustment | Cost Adjustment. This can be used to modify the average cost of the products so that the total inventory valuation is accordingly adjusted. 

Once either of the two methods above is accordingly executed, non-existent inventory should no longer be appearing in the company financials.

Note: Even though it is possible to directly create a general journal to adjust the inventory account, considering that the Inventory account is not a static control account due to any possible variance of the stocks and costing method, it is recommended to use the two methods mentioned above. 
The focus should be to maintain the Inventory summary report, Reports | Inventory | Inventory Summary, and the inventory entry in the Balance Sheet Report.

For scenarios where the active items having non-zero quantity are too many to be manually written-off through the Stock Count option, you can submit a support ticket for further analysis on how this can be achieved through a direct database update.

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Support agents handling requests to write-off inventory from the database can reference and accordingly edit the database update scripts provided in Ticket #2388032




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