Hello,

In order to track recycling containers, we create inventory items.  Each month, it would start out as zero.  And as we bill customers, it would be negative, until the month end, when we do reporting and pay for all containers, and it would zero again.

This was working well for recycling tracking.  However we didn't realize it was messing up variance and COGS.  Now the variance is off the chart, and the COGS no longer make sense.  Now after doing some research, I realize inventory items shouldn't constantly dip below 0.  So we should have set it up as service item perhaps.

I don't know where to begin fixing.  I tried to do inventory adjustment, but it doesn't fix the variance account, nor the COGS.   How do you fix a variance account that is getting out of control?  And is there a way to reset COGS?

Any help is much appreciated.