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Why does QuickBooks Online keep showing "Inventory Shrinkage" instead of my Inventory Adjustment Account?

If you've set your Inventory Adjustment Account in Webgility Online to something like Cost of Goods Sold, but you still see adjustments posting to Inventory Shrinkage (or another QuickBooks default) inside QuickBooks Online, this article explains why and how to confirm your Webgility Online setting is actually working correctly.

 Symptoms

  • You changed the Inventory Adjustment Account setting in Webgility Online(for example, from Inventory Shrinkage to Cost of Goods Sold).
  • When you open QuickBooks Online's Inventory quantity adjustment screen to manually adjust an item's quantity, the Adjustment reason and Inventory adjustment account fields show QuickBooks' defaults ("Damaged Goods" / "Inventory Shrinkage") instead of your Webgility Online setting.
  • It looks like QuickBooks is "reverting" your setting every time.

Cause

This isn't a bug, and it isn't Webgility Online reverting anything — it comes down to two separate things that look related but aren't.

1. Every inventory adjustment touches two accounts.

Whenever Webgility Online adjusts a product's quantity in QuickBooks Online, the adjustment always posts to two accounts at once:

  • Inventory Asset — tracks the change in inventory value for that item. This is fixed to the item itself and isn't controlled by the Inventory Adjustment Account setting.
  • Adjustment account — the account you configure in Webgility Online's Inventory Adjustment Account setting (for example, Cost of Goods Sold). This records the offsetting entry.

Because of this, running a report on a single product will always show two lines for the same adjustment — one against Inventory Asset, and one against whichever account you've set as your Adjustment account. That's normal double-entry accounting, not a duplicate or an error.

2. QuickBooks Online's manual adjustment screen doesn't "remember" your last choice — but that only affects manual adjustments, not Webgility Online's.

The Inventory quantity adjustment screen in QuickBooks Online (used when you manually adjust an item's quantity directly inside QuickBooks, not through Webgility Online) always pre-fills Adjustment reason and Inventory adjustment account with QuickBooks' own defaults every time you open it to create a new adjustment — regardless of what you picked the last time.

Importantly, whatever you actually select and save on that screen does get applied to that specific transaction. QuickBooks doesn't undo your choice after you save it — it simply doesn't carry your choice forward as a saved preference for the next new adjustment you create. This is standard QuickBooks Online behavior for that screen, and it's independent of Webgility Online.

How to tell Webgility Online adjustments apart from manual ones

Every inventory adjustment that Webgility Online creates carries a memo in this format:

Adjusted quantity for [item name]

You'll see this in the Description/Memo column of any QuickBooks report.

  • Has this memo? The adjustment was created by Webgility Online and used your configured Inventory Adjustment Account setting.
  • No memo (blank)? The adjustment was created manually, directly in QuickBooks — its account reflects whatever was selected (or left at QuickBooks' default) on the manual adjustment screen at that moment, independent of your Webgility Online setting.

Solution

  1. Confirm your Inventory Adjustment Account setting in Webgility Online is set to the account you want (for example, Cost of Goods Sold).
  2. In QuickBooks Online, open a report on the relevant transaction and check the Description/Memo column.
    • If it reads "Adjusted quantity for [item name]", the transaction came from Webgility Online and already posted to your configured account — no action needed.
    • If the memo is blank, the transaction was created manually in QuickBooks. To have it post to a different account, manually select that account on the Inventory quantity adjustment screen before saving that specific transaction.
  3. If you want every future manual adjustment to default to a specific account, that preference needs to be set inside QuickBooks Online itself (it isn't a Webgility Online setting) — QuickBooks does not currently offer a way to change its own default for that screen, so you'll need to select the account each time you create a manual adjustment there.

Prevention

  • Use the memo format above to quickly identify whether an adjustment came from Webgility Online or was entered manually in QuickBooks.
  • If you're auditing your Inventory Adjustment Account setting, check a transaction that you know Webgility Online created (it will have the "Adjusted quantity for [item name]" memo) rather than the QuickBooks manual adjustment screen, which will always show QuickBooks' own defaults when opened fresh.