Why does the product stock quantity sync not flow from Shopify to QuickBooks?

Overview:

This article outlines the reasons why the Inventory Sync feature is designed to sync stock quantities only from QuickBooks to Shopify, and not the other way around. By maintaining QuickBooks as the primary source of inventory data, the system ensures accuracy in financial reporting, prevents data conflicts, and follows accounting best practices.

Detailed Information:

QuickBooks is often considered the source of truth for inventory and accounting data. Allowing stock quantity updates from Shopify to QuickBooks can introduce conflicts if sales, purchases, or inventory adjustments are already being managed in QuickBooks.

Since QuickBooks is designed to track inventory costs, purchase orders, and stock valuations, syncing inventory from Shopify to QuickBooks can lead to inaccurate COGS and financial reports.

Shopify may not track inventory data in a format that aligns with how QuickBooks structures inventory (e.g., FIFO/LIFO costing, multi-location stock). This makes syncing stock quantities from Shopify back into QuickBooks technically complex.

When you decrease inventory, QBO records this as a debit to the "Shrinkage" or inventory adjustment account (i.e., an expense), and a credit to the Inventory Asset account. This reflects the loss in financial terms, which may not be the case when you manually adjust the quantity in Shopify.