How to prevent inventory variance from occurring

• Try not to let your inventory go below zero
• Use Sales Orders (or Delivery Orders with Sage 50CT) instead of Sales Invoices to prevent the inventory-related issues
• If you create a sales invoice with an item that has zero quantity,
  • Bring the quantity above zero by posting a purchase invoice or doing an inventory adjustment
  • Adjust or void and recreate the sales invoice
• Before posting a sales invoice with an item that is below zero, press CTRL + J to view the Cost of Goods Sold account

 NOTE: These methods only apply if you're using Average Cost in Sage 50.

To fix the Inventory Value and the Cost of Goods Sold expense account, make an inventory adjustment.

1. Go to Inventory & Services, then Adjust Inventory.
2. Select the inventory item.
3. In the Amount column, enter the amount of adjustment needed. This is calculated by taking the amount of value showing minus the actual amount of value needed.
4. In the Acct column, choose the Cost of Goods Sold Expense account.

Example 1: The quantity is correct but the amount value is incorrect

Inventory A Quantity is at 10 and the Value is at -$15.00 and the actual value must be at $15.00. When you create the adjustment entry:

1. Leave the Quantity column blank.
2. In the Amount column, enter $30.00 to bring the total value of the Item to $15.00.

Example 2: Quantity and Value of Inventory are both at negative amounts

Inventory A quantity is at -10 and the value is at -$30.00. The quantity must be at 10 and the actual value must be at $15.00. When you create the adjustment entry:

1. Enter a value of 20 in the Quantity column.
2. In the Amount column, enter $45.00 to bring the total value of the Item to $15.00.

How to enter an inventory adjustment