1. About

Are you seeing negative on-hand units or negative vendor balances in InventoryIQ? Don’t stress!

We designed these alerts as a mission to help you catch any missing or incorrect data. They’re just our way of ensuring everything is accurate. In this guide, we’ll explain why these alerts appear and show you how to troubleshoot them to keep your inventory numbers 100% accurate.

2. Negative on-hand units

What are negative on-hand units?

If you are using InventoryIQ, you may see this mission if your number of on-hand units for a specific product is negative (or was negative at some point this year).

If you see a "negative on-hand units" mission, it means that at some point, it looks like you sold more items than you had in stock. In other words – there seems to be a mismatch in the data.

You can also spot when you have negative on-hand units by looking at your Products page, where any red number in the On-hand units column signal negative units. There’s also a toggle at the top of the page to filter only the products with negative units.

Note: The red numbers may be a negative number, indicating that you currently have negative on-hand units or it may be a positive number, indicating that you currently have units on-hand but at some point in the past, you fulfilled units that weren’t yet in your warehouse – a clear indication that some key data is missing.

How do I fix negative on-hand units?

Negative on-hand units usually come from missing or incorrect information. Here’s how to track down the issue:

Generally, negative on-hand units come from one of the following factors:

Missing or inaccurate opening balances
Missing or inaccurate purchase orders, including shipping status that is not marked as received
Missing or inaccurate records of transfers of stock between warehouses
Missing or inaccurate recipes or assemblies
Inaccurate default warehouse

Let’s walk through step-by-step how to find and fix these errors.

Step 1: Review opening balances

Navigate to Inventory>Products and set the negative on-hand units toggle to ON. This filters the products to show only those with negative values.
Click a product row of the first product and go to the Purchases tab to open the inventory by warehouse. After, you’ll repeat these steps with each product with negative on-hand units.
If a warehouse says Missing opening balance, add the missing opening balances for that product.
Click the Edit icon next to the warehouse with a missing opening balance and enter the closing balance for that product from the last day before you switched to InventoryIQ. For example, if you switched to InventoryIQ on January 1, 2024, enter the balance on December 31, 2023.
Click Save.
You can also review all opening balances on one page by going to Inventory>Settings>Opening balance and reviewing the quantity for each unit and each warehouse.

Learn more about setting up opening balances here. If opening balances are good but you still have negative units, move to step 2.

Step 2: Review Purchase Orders and Status

While on the Purchases page of a product with negative on-hand units (see step 1 and 2 above), expand the warehouse view and review the POs related to this SKU to ensure the quantity of each PO is correct and the date received by the warehouse (if a date is not accurate, it can result in negative units as a result of the timing differences).
Review to ensure all the POs for this product were included and that all dates that the shipments are marked as received are correct.
When setting up InventoryIQ, make sure to add any POs from before you started using InventoryIQ if the items were received after your start date. This is a common mistake that can cause negative on-hand units.

If you need a refresher on how to manage your POs, check out this article.

If all POs are good, move to the next step.

Step 3: Review transfers of stock between warehouses

Sometimes stock doesn’t arrive from a supplier through a PO but instead is shipped between different warehouses. For example, maybe you received stock from a supplier into your 3PL warehouse but then transferred it to Amazon FBA.

Review all your transfers between warehouses by clicking on Inventory>Transfers and reviewing all the transfers you created to ensure the data is completely updated. Also make sure to add any transfers that were created before you started using InventoryIQ but the items were received only after your start date.

If you've completed this and you still have negative on-hand units, let’s jump to the next step.

Step 4: Review recipes and assemblies

If you have certain products with recipes, but have been working with only manual assemblies and not on-demand assemblies, you may have forgotten to update the data of new production runs / manual assemblies that occurred.

Review each of the recipes and assemblies you’ve entered to ensure we’re not missing any information. You can get a refresher on managing your recipes and assemblies here.

Still seeing negative on-hand units? Don’t worry, we’ll find the issue! Let's try the next step.

Step 5: Review default warehouses

A negative on-hand unit alert may arise if a default warehouse is not set to the correct warehouse.

Head over to Inventory>Settings>Warehouses and click Edit defaults to view and edit the default warehouses for each sales channel.

Note: another factor that may impact your negative on-hand units is your Shopify fulfillment method. Finaloop offers 2 choices on when to recognize sales in your books that we sync from Shopify - at the time of order or at the time of fulfillment. To learn more, check out our article on understanding your Shopify numbers.

3. Negative vendor balances

What are negative vendor balances?

If you record an extra inventory payment or bill that isn’t tied to a Purchase Order (PO) or transfer, you might see a negative balance for that vendor. This could mean one of the following:

A PO or transfer is missing.
The PO or bill details are incorrect.
The transaction or bill is incorrectly categorized.
Or you may have overpaid your vendor.

When this happens, we’ll trigger a mission to alert you of the issue.

How do I fix negative vendor balances?

When you see this mission, here’s how to track down and fix the issue:

Step 1: Review Purchase Orders and Transfers

Go to Inventory > Purchases > Vendors to check any negative balances.
Set the inventory vendors have negative balance toggle to ON. This filters the vendors to show only those with negative rolling balances.
Click a vendor to view the details of their balance changes.

Double-check that all POs and transfers for this vendor are added and accurate.

Tip: If the issue relates to indirect costs and a PO or transfer is missing under the vendor, make sure the vendor name is correctly added under indirect costs. For example, edit the “Duties and tax” to assign it to the correct vendor.

Step 2: Review payments

When reviewing negative vendors, review the payments and ensure all payments you see relate to POs or transfers created.
If a payment doesn’t relate to a PO or transfer (e.g., a small expense like packing paper), you can categorize it as “incidentals.”
1. To categorize as incidentals:
  1. Click the payment link to go to the Bills & Payments page.
  2. Select the payment and go to Actions > Change type
  3. Choose Incidentals from the dropdown and click Save.

Note: Recording inventory as incidentals assign them directly to your P&L (as Product COGS, under the COGS section).

With some exceptions, under US tax laws, inventory-related costs should be categorized as inventory and expensed only when sold. We recommend that you consult with your tax advisor, CPA, or accountant to make sure you're compliant with the relevant laws.

Step 3: Add historical POs and historical payments

When setting up InventoryIQ, make sure to add any POs or transfers from before you started using InventoryIQ if the items were received after your start date. Also, add any payments tied to these historical POs.

> To add a historical payment:

Go to Inventory > Purchases > Bills & Payments.
Click Actions > Add a historical payment.
Enter the payment date, amount, vendor, and category.
Click Save.

If none of these steps fix the issue, feel free to contact our support team at [email protected] for more help. We’ll dive deeper and sort it out!