How To Prevent Negative Inventory Using QuickBook?

Updated: Aug 2, 2020



What is negative inventory?

Negative inventory is a condition that inventory count shows that there are less than zero item in stock. This is a common temporary inventory condition that occurs because inventory is closely tracked using computer systems, different accounting methods, etc. mistakes in the process can actually cause a negative inventory balance.

 

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Prevent Negative Inventory

Correcting negative inventory can be as simple as waiting for a brief period to see if it self corrects. In contrast, people will have to investigate how the problem cropped up. It is undeniable that “Prevention is better than cure” because serious mistakes can't be completely eliminated while people can substantially reduce their occurrence through a handful of tips bellow.

Hire qualified manager

Almost every company potentially has hundreds of thousands of dollars tied up in inventory. Thus, hiring professional and trustworthy people having a solid background with inventory is actually important.

Emphasize training from the start

The training is usually customized for each company, and workers should be learning best practices from the very beginning. Moreover, many vendors offering inventory management software and solutions will conduct on-site training for your employees. Jump on this opportunity!

Track order accuracy rates carefully

If you can’t recite your accuracy numbers for any recent interval, you aren’t keeping track well. Some easy things to track are returns, customer complaints, and inventory comparisons.

Perform cycle count

Cycle counting is the process of counting a small, predetermined set of goods, and materials frequently rather than performing a full physical inventory once per year. This is an important part of internal control procedures. Effective cycle counting requires counting a certain number of SKUs each day, and each SKU is counted at a prescribed frequency.

Select right software

Use leading inventory, order management and manufacturing solution, like Quickbooks, etc. to track inventory effectively. QuickBooks Enterprise has a great preference to prevent negative inventory. For example, people can set up software to keep negative inventory from happening, or run a stock status report periodically to identify negative on-hand quantity and to quickly discover SKUs with negative inventory.

Here are some detailed illustrations to prevent inventory by using Quickbooks Enterprise.

To turn on the preference:

  1. Go to “Edit/ Preferences/ Items and Inventory” on the menu bar

  2. Check the “Warn if not enough inventory to sell” check-box

  3. Choose “Don’t allow negative quantities”