If you've set up the QuickBooks Online integration for accounting with Costs Of Goods Sold (COGS), purchases will be mapped to an Inventory account in QuickBooks. If you send a bill to QuickBooks from a Purchase order (PO) that contains ingredients totalling $50, the inventory account balance in QuickBooks will also be $50.

Once you sell the completed product (with ingredients) and send the invoice to QuickBooks from the Katana Sales order (SO), a journal entry will be created in QuickBooks. The inventory account will be credited $60 (the final cost of the product), thus ending with an inventory account balance of -$10.

To address the negative balance in the inventory account, we need to record a transaction in QuickBooks to increase the inventory account by the amount of the operations cost (while also crediting a liability account, e.g. "salaries payable"). This is what sending the Operations cost from Done Manufacturing orders (MO) allows you to do.

The feature can be enabled in the QuickBooks Online integration setup dialogue, when selecting Accounting with Cost of Goods Sold (COGS):

On the next screen, you can map liability accounts:

Once completed, the Done tab for Manufacturing Orders will display the following option when selected MOs: