We would like to maintain a three stage inventory in quick books. Raw Materials, WIP and Finished Goods. We encounter autogenerated Cost of Sales from move of inventory.

We would like to maintain inventory in three stages. Raw materials, Work in Progress and Finished goods. We have setup the Inventory items however, whenever we proceed with transferring the inventory from 1 stage to another, an autogenerated entry is being included and only shows in transactional Journal. Note that we record the transfer of Raw Mats to WIP in Expenses module as this is not available in JE.

For Example.

We would like to move the volume from raw mats to WIP.

We record in Item details..

Raw materials with negative qty and negative amount.

WIP with positive qty and amount.

However when we check in transaction journal two line items were added in the transaction that is a debit to Cost of Sales and a credit to Raw Materials.

as if the move of the inventory was considered as sale however the amount of the line items are arbitrary and does not equal any of our entries.

We would like to eliminate the added lines as we would only like to move the qtys and amounts from one item to another.

cos_added.png
Original_entry.png

Answer

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You mention journals, it is not clear if you are using a journal entry or not, but, if you are using QB inventory items, you can never use inventory asset in a journal entry, an adjustment, or a purchase - all you do is mess up the books when you do that.

Inventory asset is a summing account, think of the item name as a sub account where qty and value is kept isolated from each other.

Create a dummy bank account called WIP.
create a dummy vendor called in-house

Use inventory adjust, set the adjusting account to WIP, and lower the qty of the items used - that moves raw material value to the dummy bank WIP

In real life, make the finished good, now you know the qty made

In QB, enter a purchase for the finished item from the dummy vendor, and use the WIP bank account to pay for that purchase.  You use the item detail part of the purchase, select the finished good item, enter the qty actually made, and enter the total amount in the WIP dummy bank as the total cost of the item.
that stocks the finished item with qty and cost


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