Inventory Accounting
Tracking materials, supplies, and inventory items with proper counts and valuations. Your cost of goods sold stays accurate, your stock levels stay current, and your profit margins reflect reality.
What This Covers
If your business buys products to sell or uses materials to deliver a service, those items need to be tracked in your books. Not just what you purchased, but what you have on hand, what it’s worth, and how the cost flows through to your profit and loss statement. Without that structure in place, your financial reports are telling you the wrong story about how much money you’re actually making.
I set up and maintain inventory tracking in QuickBooks Online so your records match what’s physically in stock. Purchases get recorded properly, cost of goods sold gets calculated correctly, and your balance sheet reflects real inventory values instead of outdated guesses. Whether you carry a handful of SKUs or several hundred, the process stays consistent and organized.
Tracking and Valuation
Tracking and Valuation
Every item that comes in and goes out gets recorded. I maintain accurate quantities and unit costs so your inventory asset on the balance sheet reflects what you actually have. When costs change from your suppliers, those updates get captured so your valuations stay current and your margins stay honest.
Cost of Goods Sold
Cost of Goods Sold
COGS is one of the most important numbers on your profit and loss statement, and it’s one of the most commonly wrong. I make sure inventory costs flow through correctly when items are sold or used. That way your gross profit actually means something when you look at your reports each month.
Where It Goes Wrong
Most inventory problems in the books don’t start with a big mistake. They start with small shortcuts that build up over time. A purchase gets recorded as an expense instead of an inventory asset. A count gets skipped for a couple of months. Someone changes suppliers and the new cost never gets updated. Each one of these is minor on its own, but together they distort your numbers in ways that are hard to untangle later.
The result is that business owners end up making decisions based on profit margins that aren’t real. You think you’re making 40% on a product line when the actual margin is closer to 25% because costs weren’t tracked properly. Or you reorder too much of something because the system shows you’re low when the real issue is that sales were never deducted from the count. These are the kinds of problems that quietly eat into your cash flow.
Inaccurate Profit Margins
Inaccurate Profit Margins
When inventory costs are lumped into general expenses or recorded at the wrong value, your gross profit is unreliable. You can’t tell which products or materials are actually making you money and which ones are dragging you down. Pricing decisions made on bad data lead to bad outcomes.
Tax Time Surprises
Tax Time Surprises
Inventory affects your taxable income directly. If your ending inventory value is wrong, your cost of goods sold is wrong, and your reported profit is wrong. That means you could be overpaying or underpaying on taxes without knowing it. Either way it creates problems you don’t want to deal with in April.
What You Get
Your inventory records stay accurate and up to date without you having to manage the bookkeeping side of it. You know what you have, what it cost, and what your real margins look like. When you pull up your profit and loss statement, the numbers reflect the actual cost of the goods you sold, not a rough estimate based on what you spent at the beginning of the year.
That clarity changes how you run the business. You can see which products or materials are worth stocking and which ones aren’t pulling their weight. You can negotiate with suppliers because you know exactly what you’re paying. And when tax season comes around, your inventory values are already documented and ready to go instead of becoming a last-minute scramble.
Better Purchasing Decisions
Better Purchasing Decisions
With accurate inventory data in front of you, reordering becomes straightforward. You can see what’s moving, what’s sitting, and where your money is tied up. That means fewer impulse orders and less dead stock taking up space and cash that could be used elsewhere in the business.
Clean Reports You Can Trust
Clean Reports You Can Trust
Your balance sheet shows a real inventory value. Your profit and loss shows real margins. When a lender, investor, or tax preparer looks at your financials, the inventory numbers hold up. You stop guessing and start working with information you can actually rely on.
Long Beach's Trusted Bookkeeping Partner
The Next Step:
A Quick Discovery Call
Tell us where things stand with your books. We'll listen, ask a few questions, and give you a clear quote to get it handled.
