RoadDancer:

Using the inventory adjustment feature is your best way to correct the inventory. However, I may suggest changing the system to not allow negative inventory. The other change I may suggest is changing from average costing to FIFO in Sage 50. What generally happens is clients do not put their inventory purchases in first before they invoice to the client. This creates negative inventory and incorrect values.

Hope this helps!

Thanks.  Their inventory is set to FIFO as they use serialized inventory.  I would love it if they would set their inventory to not allow negative inventory, but that has been turned down, which is creating the issues.  Due to staffing/money issues (they are in Alberta!), there isn't the staff to input purchases prior to sales, hence the allowance of negative inventory.  We have found a work around for some of the issues, but now the big problem is going to be zero inventory with a value (negative or positive).  I need to have the inventory values to zero.  I sure wish the Inventory adjustments were more flexible and visible - more transparent like I also wish our politicians were LOL!!

when I try to turn the 'allow inventory to go below zero' feature, it is greyed out and I am unable to turn it off.  Any idea how to resolve this?

This is likely because you have inventory with quantities below zero right now.  Once they are positive quantities or zero, you should be able to turn it off.