How to Adjust Inventory Quantity & Value in QuickBooks Desktop

To adjust inventory in QuickBooks Desktop, go to Vendors > Inventory Activities > Adjust Quantity/Value on Hand. Pick an adjustment account, select your items, and enter the new quantity or value (or both). QuickBooks updates your inventory asset and COGS accounts automatically.

You count your stock on Friday. QuickBooks says you should have 48 widgets. You have 41. Seven widgets have vanished into thin air — damaged, miscounted on receipt, walked out the door, who knows.

This happens in every business that holds inventory. The question is what you do about it. The wrong answer is to quietly edit old transactions to make the numbers match (please don't). The right answer is an inventory adjustment: a clean, documented entry that brings QuickBooks in line with reality and leaves a paper trail explaining why.

Adjustments also handle the less dramatic stuff — correcting a data entry error, writing off obsolete stock, updating values after a cost change. Let's walk through it.

Table of Contents

When should you adjust inventory?

After a physical count. The shelf count doesn't match QuickBooks. This is the most common reason, and it should happen on a regular schedule — not once a year in a panic.
Shrinkage, damage, or spoilage. Items that are broken, expired, or missing need to come off the books.
Data entry errors. Someone received 100 units against a bill but typed 10. The purchase already happened; now the quantity needs correcting.
Value corrections. Your average cost is wrong because of an old error, and you need to restate what the stock is worth.

What you should NOT use adjustments for: recording normal purchases and sales (those belong on bills and invoices), or fixing things by editing historical transactions. Adjustments are for bringing the books to reality, not rewriting history.

Before you start: set up an adjustment account

QuickBooks needs an account to post the other side of every adjustment to — the offset for the change in your inventory asset value. If you don't have one yet, create it:

Go to Company > Chart of Accounts.
Click the Account dropdown at the bottom and select New.
From the account type dropdown, choose Cost of Goods Sold.
Name it something clear like "Inventory Adjustments."
Click Save & Close.

Using a dedicated account (instead of dumping adjustments into a generic expense account) means you can see exactly how much inventory value you've written off over time. That's useful information — a growing adjustments balance means something's wrong in receiving, storage, or counting.

How to adjust inventory quantity and value, step by step

Step 1: Open the adjustment window

Go to Vendors > Inventory Activities > Adjust Quantity/Value on Hand.

Step 2: Choose your adjustment type

In QuickBooks Desktop 2024, use the Adjustment Type dropdown to pick Quantity, Total Value, or Quantity and Total Value — depending on what you're fixing.
In 2023 and older, you'll see the classic layout: quantity columns by default, with a Value Adjustment checkbox if you also need to change values.

Step 3: Pick the adjustment account and date

In the Adjustment Account (or Adjust Account) dropdown, select the inventory adjustments account you set up.
Enter the Adjustment Date. Use the actual date of the count or the date you discovered the discrepancy — not "whenever I get around to entering it."
Add a Reference No. if you use one (like the count sheet number), and a Memo explaining why. "Physical count 9/28 – 7 units short, damaged packaging discarded" beats a blank memo every time. Future you will be grateful.

Step 4: Select the items

Click Find & Select Items (or Items, depending on your version).
Search for and select the items you're adjusting. You can adjust multiple items in one entry — handy after a full physical count.
Click Add Selected Items.

Step 5: Enter the new quantities or values

For each item, enter the New Qty — what you actually have on hand. QuickBooks calculates the difference automatically.
Or enter the Qty Difference directly: negative for a decrease (-7), positive for an increase.
If you're adjusting value, enter the New Value. This changes the average cost of the items in stock, so be deliberate about it — value adjustments ripple into COGS on future sales.
Double-check the differences before saving. A typo here creates a brand-new discrepancy.

Step 6: Save it

Click Save & Close.
QuickBooks updates the quantity on hand, recalculates the inventory value, and posts the offset to your adjustment account. Done.

Step 7: Verify with a report

Go to Reports > Inventory.
Run the Inventory Valuation Summary to check values and the Inventory Stock Status by Item to check quantities.
Find your adjusted items and confirm the numbers now match reality. If they don't, you know immediately — not three months from now.

Common mistakes to avoid

Adjusting without a memo. An adjustment with no explanation is a mystery for the next person (or your accountant) to solve. Always note the reason.
Using the wrong adjustment account. Posting adjustments to a random expense account hides them. A dedicated inventory adjustments account keeps them visible and analyzable.
Adjusting value when you meant quantity (and vice versa). Changing the value recalculates average cost — which affects COGS on every future sale of that item. If the count was just wrong, adjust quantity only.
Correcting errors by editing old bills. If a receiving error caused the discrepancy, fix it with an adjustment dated now, not by rewriting a bill from six months ago. Rewriting history breaks the audit trail and can unbalance reconciled periods.
Never doing physical counts. Adjustments are the fix; counts are the detection. If you only adjust when something looks obviously wrong, small discrepancies accumulate silently for years.

Conclusion!

That brings us to the end of this guide on adjusting inventory quantity and value in QuickBooks Desktop. We hope the steps explained above helped you bring your stock counts and values in line with reality — cleanly and with a proper paper trail. If you run into any difficulty while following the steps, consider consulting a qualified and experienced QuickBooks professional for further assistance.

FAQs

Will an inventory adjustment affect my COGS?

Yes. The offset posts to your adjustment account (typically a COGS-type account), which increases your cost of goods sold when you write down inventory. That's correct accounting — the lost or damaged stock was a cost of doing business.

Can I adjust inventory for a past date?

You can date the adjustment whenever you want, but backdating into a closed or reconciled period is asking for trouble. Date adjustments in the current open period whenever possible.

What’s the difference between adjusting quantity and adjusting value?

Quantity adjusts how many units you have. Value adjusts what they're worth (the average cost). Adjust quantity when the count is wrong; adjust value when the cost basis is wrong. You can do both in one entry if needed.

Do I need Advanced Inventory for this?

No. Basic quantity and value adjustments work in QuickBooks Desktop Pro and Premier. Advanced Inventory (Enterprise) adds features like bin tracking and FIFO — useful, but not required for standard adjustments.

How to Adjust Inventory Quantity and Value in QuickBooks Desktop