The dangers of Negative Inventory in QuickBooks

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Kingston, United Kingdom, 10th Sep 2022, King NewsWire, The longer dealing with negative inventory problems in QuickBooks, the longer it would take making business decisions based on incorrect information.

Negative inventory left unchecked will lead to issues varying in severity, from a minor inconvenience to a production-stopping problem for a business. QuickBooks does not prevent users from selling more items than are available in stock. When this happens, the item’s quantity becomes negative. 

Items are often sold even though there is an insufficient quantity on hand. It is very important to prevent inventory quantities from falling into a negative status. Why this happens could be due to several reasons – the most common of which are that inventory control takes time. In order to track inventory quantities, every transaction that affects inventory would have to be entered. Also, in case of drop-shipping, the sale would need to be recorded before the item is ordered. By embracing negative stock, there is a danger of bigger problems for a business, mostly because of unnecessary decisions, such as ordering more materials or starting production, due to faulty information.

Negative inventory is also bad because Profit and Loss Cost of Goods Sold (COGS) amount turn out incorrect, cash basis balance sheets are out of balance, balance sheet inventory amounts show incorrectly, vendor reports contain errors and bills for inventory purchases show up on income and expense reports.

The situation of negative inventory can be avoided by setting up inventory items with an opening balance. This can be done by entering the quantity on hand and value to establish the average cost when creating a new inventory item. Non-posting estimates and sales orders can be used to track sales for which inventory is available. Pending invoices can also be used to enter sales for which inventory is available. 

Withholding employee permissions prevents employees from making similar mistakes, while setting the date lock prevents users from entering transactions that they may have forgotten to enter before the end of the month.

E-Tech offers a repair service to fix all instances of negative inventory in the QuickBooks file. The service will analyze the source data file to identify the items and dates the quantity on hand went negative and then fix all occurrences of negative inventory. The repaired file will not contain any trace of negative inventory and will verify correctly in QuickBooks. 

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About E-Tech

E-Tech is the leading service provider of QuickBooks File Repair, Data Recovery, QuickBooks Conversion and QuickBooks SDK programming in the UK and Ireland. In our 20 years plus of experience with Intuit QuickBooks, we have assisted over a thousand satisfied customers with their requirements.

We offer a range of services for existing QuickBooks users and provide comprehensive solutions for small businesses. Additionally, our expertise covers the US, UK, Canadian, Australian (Reckon Accounts), and New Zealand versions of QuickBooks (PC and Mac platforms).

For media inquiries regarding E-Tech, individuals are encouraged to contact Media Relations Director, Melanie Ann via email at

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Country: United Kingdom


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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Economy Port journalist was involved in the writing and production of this article.