Adjust Quantity on Hand and Account For Damaged Inventory
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4 Comments
Houston R on June 13, 2019 at 1:06 pm
Vicki,
Thanks for your great course. I have one question about damaged inventory. I understand I adjust the item and place it in an expense account but how do I handle the reimbursement? Do I make a new income account labeled Amazon Reimbursements? I’m running into a problem when posting payments I see the reimbursement amount but I’m not sure how to account for that with no invoice for those goods.
Thanks for you comment on the course. I’m glad it’s been helpful to you. Yes, if you have done the adjustment to expense and Amz reimburses you, I would make the income account as you described above and receive that money on the payment posting. Just go to the bottom of the Bill and post the reimbursement there with a credit (-) sign.
There’s so many ways to do the accounting and it is difficult to nail it down in a course designed for so many different sellers that I kind of leave it open. Besides that, AMAZON doesn’t always reimburse for damaged items. I have at least two items right now that they either lost or damaged that they are not going to reimburse me for. So the expense and adjustment would be all I need to do.
Another school of thought that I take is that reimbursements are sales to Amazon. So, in doing the Mass Invoice, I just process it as a sale. If an inventory adjust is needed at some point, I just do it when I am taking inventory. Some times Amazon reimburses me before I know the was a damaged or lost item. It all washes in the end.
Thanks for the quick response! I liked your idea of “selling to Amazon” and was trialing different ways to account for this. I found another way that makes my wash account reflect accurately when I receive the payment. I added “Amazon Reimbursement” as a non-inventory item that way I can make an invoice for Amazon and specify the reimbursement IDs, item and the amount reimbursed in the description. Then when I go to receive the payment I can select these reimbursement invoices just like my sales invoices and receive the payment. With your experience with Quickbooks, do you see me running into any accounting problems in the future by doing it this way?
Wow, that’s a creative take on reimbursements. It sounds like it will work. Since you are using non-inventory item, you only have an income account, not COGS nor Inventory Asset. So it only posts to income like it would on the Bill scenario I outlined in the previous comment. I can’t think of any cons to using that system. Try it out for a while and let me know how it works for you. Thanks for sharing.
Vicki,
Thanks for your great course. I have one question about damaged inventory. I understand I adjust the item and place it in an expense account but how do I handle the reimbursement? Do I make a new income account labeled Amazon Reimbursements? I’m running into a problem when posting payments I see the reimbursement amount but I’m not sure how to account for that with no invoice for those goods.
Thanks for you comment on the course. I’m glad it’s been helpful to you. Yes, if you have done the adjustment to expense and Amz reimburses you, I would make the income account as you described above and receive that money on the payment posting. Just go to the bottom of the Bill and post the reimbursement there with a credit (-) sign.
There’s so many ways to do the accounting and it is difficult to nail it down in a course designed for so many different sellers that I kind of leave it open. Besides that, AMAZON doesn’t always reimburse for damaged items. I have at least two items right now that they either lost or damaged that they are not going to reimburse me for. So the expense and adjustment would be all I need to do.
Another school of thought that I take is that reimbursements are sales to Amazon. So, in doing the Mass Invoice, I just process it as a sale. If an inventory adjust is needed at some point, I just do it when I am taking inventory. Some times Amazon reimburses me before I know the was a damaged or lost item. It all washes in the end.
Hope that helps.
Vicki,
Thanks for the quick response! I liked your idea of “selling to Amazon” and was trialing different ways to account for this. I found another way that makes my wash account reflect accurately when I receive the payment. I added “Amazon Reimbursement” as a non-inventory item that way I can make an invoice for Amazon and specify the reimbursement IDs, item and the amount reimbursed in the description. Then when I go to receive the payment I can select these reimbursement invoices just like my sales invoices and receive the payment. With your experience with Quickbooks, do you see me running into any accounting problems in the future by doing it this way?
Wow, that’s a creative take on reimbursements. It sounds like it will work. Since you are using non-inventory item, you only have an income account, not COGS nor Inventory Asset. So it only posts to income like it would on the Bill scenario I outlined in the previous comment. I can’t think of any cons to using that system. Try it out for a while and let me know how it works for you. Thanks for sharing.