How to Deactivate Inventory Items in QuickBooks Online

Use these steps to deactivate inventory product/service items that are no longer used

Find out whether there has been any recent activity on the product item

1. Log in to QBO
2. On the black left navigation menu, go to Reports > Standard Reports
3. In the report search box, search for “inventory valuation detail” 
4. Change the date range to something that makes sense to you, such as the past 5 years, and click the Run Report button
5. Scroll through the report, reviewing each item and its activity to determine which items you want to deactivate, such as those with no activities.

PRO TIP: If you want to keep that report open and do the next steps on different tabs/screens, go to your browser tab, right-click to open the shortcut menu, and click “Duplicate”.  A new tab will appear already logged in to QBO so you can use it to go to the next step, while still keeping your report open on this first tab.

Set Quantity to Zero

1. On the “Inventory Valuation Detail” report, look at the Qty column and see what the current total quantity is.
   1. If it is zero, then you can de-activate it. (next step)
   2. If it is not zero, then you need to make an adjustment (below)
2. Go to the black left navigation menu and to the +New button at the top
3. In the 5th and far right column of the +New menu, click to select “Inventory Qty Adjustment.”
4. Enter the date you want the adjusting entry to hit the GL
5. Select the account you want to post this inventory adjustment to (such as “Shrinkage Expense”)
6. On the lines, enter the product item code, look at the current quantity on hand count, then enter a zero for the new quantity on hand count.
7. You can adjust multiple items here
8. Save and Close

Deactivate items

1. Go to the black left navigation menu and click Products and Services 
2. On the Products and Services screen, use the search field to type in the code of the item you are looking for
3. On that product item’s row, on the far right in the Action column, click the down arrow to see the menu, and choose “Make Inactive.”
4. Don’t be afraid to make things inactive, because you can always use the grid filter to show inactive items and make it active again.

Notes

• The instructions above only apply to “Inventory” type products and services.  This “Inventory” type is the only one that tracks on-hand quantity in QBO.  There are other types of products and services that do not track quantity on hand – non-inventory, service, bundle. These other non-inventory types of products can be made inactive at any time; there is no need to write off the quantity on hand first.
• When on the Products and Services screen, you can use the filter icon (which is just next to, on the right of the product search box) to control which products to show on the screen – Active, Inactive, or All