You don't have to use QB and "inventory Items" to use QB to Track inventory.
Using the Items = Perpetual Inventory Management.
You also can use Periodic Inventory Management. This is what, for instance, a used car lot of RV sales will do, because every item is not the Same Item, over and over. It's not, "Oh, here is another head of iceberg lettuce." Inventory Items need to be the Same thing, every time, counted and managed and on hand and restocked for selling.
"this company does not track inventory through QuickBooks program, the item list is for price reference only. But since I didn't know this information at first, when I was creating invoices I was using the item list. Every invoice I created also created a negative quantity in the item list and inventory."
Perhaps they also had a Noninventory Version of what they sold, before you arrived. Or, they used Service items. Look at older sales, to know what they listed in the past.
"While the company was applying for a loan in November, this error was finally brought to my attention by the bank. When I brought it to the attention of the CPA for the company, his response "Yeah, I noticed that in July." He gave me some adjustment to do"
Your Correction might be to update the sales to use the Right Item, and not the inventory items at all.
"I have changed procedures so that invoices no longer go against the inventory, but I still have negative numbers in the inventory."
Change the selling item(s) you listed there.
"Is there a way to do an inventory adjustment without having to go into each individual invoice (over 600 were done wrong) and changing them so that they do not go against the inventory?"
The problem with that concept is that you have to identify where is the value for what you sold, to reflect what it cost you to acquire it?
You don't just Throw Values at the data; you need to make meaningful entries.
Example:
1. You really did Buy the stuff you sold, but you didn't know to list the Inventory item on the Items tab of the purchases. That meas updating the Purchase transaction Details will put the cost and quantity on hand. Make sure you Bought it on a date that is before you sold it; this is sort of required in reality.
2. You custom ordered stuff that was sold, so the Noninventory item should be Two Sided, listed on the Items tab of the Purchase, job tracked that it is for that customer, Marked as billable, so that you can Select it when selling to the customer using Sales receipt or invoice. That means Changing the sales that used the Inventory item to the noninventory item. And if the purchases are already hitting COGS, then you don't also need further adjustments. And since you already put them on Sales, you don't need to go back to the purchase to job track it, unless you wanted to see the cost related to the sale for that same customer and item. And don't bother to mark them Billable now, since you already Charged the customer; you don't need that status, so click on and remove the checkmark.
3. Your sales listed inventory and you needed this to all be inventory. But, the purchases posted to COGS directly, every time. That means you were missing Asset value all along. That means you would update the Purchase details. Or, you would use Adjust inventory by dates, to update the things that were supposedly on hand before selling. You are doing a Quantity and Value adjustment and top left, you pull From the COGS account, because it was sent there prematurely from the Purchased data entered generically.
In other words, use the Fix that applies to the problem. That means updating Purchases, updating Sales, and/or making Inventory Adjustments.
Never use JE for this.
