Hi @jmcrider11,

Thank you for your prompt reply. 

I suggest you create an expense account to track the amount you lose for a waste inventory item. What you need to do next is to add a service to the Products and Services page. 

Follow these steps to create the expense account:

1. Click the Accounting tab.
2. Select New.
3. Set the Account Type to Expenses, then choose whichever is closest to the Detail Type.
4. Enter a name.
5. Hit Save and Close.

Next up, you need to create a service to link this expense account. Here's how:

1. Highlight the Sales tab.
2. Select Products and Services.
3. Press New.
4. Select Service.
5. Enter a name.
6. Change the Income account to the expense account you created above.
7. Click Save and close.

At this point. you can create a sales receipt with the service you recently created. Under the Amount column, type in the total amount for the damaged inventory items in question. This will count as a loss for your business.

I suggest you view this article: Can I track inventory manually in QuickBooks Online? Here you can follow the steps to track inventory items in your QBO company, even without the inventory feature enabled. 

Need further assistance with this process in QuickBooks Online (QBO)? Post a reply, and I'll be sure to get back to you.