Inventory on Hand Issues

I have a little issue with my inventory which was our own mistake. Items has been received and sold but because we are a service company our invoices are issued per the service and not the parts that we used for the service which has been captured in the inventory.

So now, the inventory item still indicates the items used as still available on hand. Any help as to how i can correct this mistake?

you said you are selling the items. in that case if you have selected the inventory in your sales invoice, the quantity will be automatically reduced from your inventory on hand account.

please provide screenshots of your sales invoice edit screen so that other users can better understand your issue. you can obscure confidential details.

for that case, for each sales invoice, you can use inventory write-off for the parts those are used for that service

this will affect the P&L and is not the proper method for this situation.

@Bridge from what i have understood from your initial post, you are not selecting any inventory items on your sales invoice but entering it as a single line for the whole service by selecting a suitable account. is this correct?

you can create an inventory item for your Service (separate inventory items if you want to differentiate different services), and then make production orders including all the items you have used for the Service. you can also allocate the Service to any control account of your choice. the production order will reduce the quantity of items used in your Service.
now, you can just select the newly created inventory item Service on your sales invoice which will reduce its quantity too from your accounts.

another approach will be use of inventory kits. but this is possible only if the service consumes fixed quantity of items.

you can read the guides on production orders and inventory kits to understand better.

This is right. Exactly my case.

@Bridge, contrary to what @sharpdrivetek wrote, inventory write-offs are one correct way to handle this. You are making a non-revenue reduction of inventory, because you are not charging the customer for the items. You are consuming the items yourself in the process of performing the service. This is just like writing off inventory items given away as samples. See

However, a simpler way to handle this is to list the inventory items consumed on the sales invoice, but edit the sales price to be zero. (Or, if all your inventory items are sold in this way, leave the sales price field blank when defining the inventory items. Then, nothing will appear.) This way, the customer sees what you have sold to them or used during the service, as well as the fact that they are not being charged separately for such items. The inventory item descriptions could also contain a note saying they are not charged separately.

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Thank you all. The advise is perfect Tut.