@ sharifah

1) Do we need to create new invoices for all previous sales transaction? So that the inventory will be updated too.

If there are only a few sure go ahead and do that, then you have some customer history too.  But if there is a bunch, just use inventory adjust, set the adjusting account to COGS and lower the qty of the item previously sold.  That will get you current.

Then the work flow in QB is and has always been, enter transactions, download banking, match.

Yes inventory is only reduced when sold on a sales receipt or invoice.