What is Inventory?
Inventory is any goods or materials that your business holds for sale or use in production. In accounting terms, inventory is an asset on your balance sheet that will either be sold directly to customers or used up while producing the products you sell. Some common examples include:
Input materials purchased, stored, and used over time
Goods that you purchase with the intention to resell
Crops you grew but have not yet sold
Animals you raised with the intention of selling (as opposed to retaining)
Inventory on Ambrook
Ambrook’s inventory is designed for operations that want operational visibility and accurate managerial financial reports. Some of the key features are:
Inventory that updates automatically as you create your bills, invoices, or usages
Flexible costing methods (FIFO or WAC) per item, not system-wide
Support for both purchased and self-produced inventory
Real-time quantity visibility for your whole team
Built-in market value reporting for lender presentations
Inventory is a great fit for businesses that:
Track the inflows and outflows of business inventory in detail
Hold inventory, either supplies or sellable goods, for 30+ days
Want your inventory-related expenses to appear on the Profit & Loss statement at the time they are actually used in the business
Importantly, tracking inventory in an accounting system is not the best for all business types. Some reasons you may not want to track inventory in Ambrook include:
You only want to keep simple, cash basis books and want to minimize admin work.
You have complex inventory that needs to be tracked across multiple measurement types, or is produced as part of a manufacturing process - for example, you have a feed mix made up of multiple input inventory items
You want to keep detailed, non-financial, inventory records - for example, tracking the health and medication history of every animal you own
Tip - Not everything you keep track of is inventory. Fixed assets like equipment or breeding stock should not be tracked as inventory items. One useful trick: if you depreciate something then it is not an inventory item. |
How to setup inventory
Setting up inventory on Ambrook is a simple three step process. No matter what kind of business you run, you will need to:
This video walks through the overall set-up process end to end, and you can also reference the articles linked above for more detail on step-by-step set-up.