Subject: Negative Inventory Clearing vs Inventory Cost Expense

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Screenshot 2026-07-23 145344
Screenshot 2026-07-23 1453441397×832 65.1 KB

Hello everyone,

I am trying to understand the behavior of Negative Inventory Clearing in Manager.io.

When we sell an inventory item before it is available in stock, Manager.io records the cost in the Negative Inventory Clearing account under Assets. I understand this part.

If I want, I can manually pass a Journal Entry to move that amount from Negative Inventory Clearing to Inventory - Cost (Expense).

However, my confusion is this:

Even when I do NOT pass any Journal Entry, I notice that some amounts remain in Negative Inventory Clearing (Assets), while some amounts automatically appear in Inventory - Cost (Expense).

My questions are:

  1. Why does Manager.io automatically expense some negative inventory amounts without any Journal Entry?
  2. Why do some amounts remain in Negative Inventory Clearing while others move to Inventory - Cost?
  3. Is this related to purchase invoices, production orders, inventory receipts, or the average costing calculation?
  4. What is the recommended workflow to avoid this situation and keep inventory costing consistent?

I have attached a screenshot showing that Negative Inventory Clearing still has a balance under Assets, while Inventory - Cost also contains expense amounts.

I would appreciate an explanation of the logic behind this behavior.

Thank you.

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This is very important aspect highlighted, but I am surprised no one has responded or even liked it :pensive_face:

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Waiting Reply on this Topic :worried:

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I am repeatedly facing the same issue, out of blue negative inventory start piling up, so i have to run correction from settings. I could,nt understand the logic behind it.