--- title: The Ins and Outs of Inventory Data Management description: Cyndi Thomason shares best practices for inventory data management and how incorporating these tips will help you not just at tax time, but all year long. image: https://www.ecomengine.com/hubfs/images/featured/blog/inventory-data-management.png --- [![eComEngine Logo](https://www.ecomengine.com/hubfs/Style%20Guide/Logos%20(svg)/%5BeComEngine%5DLogo-2019-linear.svg "eComEngine Logo")](https://www.ecomengine.com) [Demo](https://www.ecomengine.com/demo) [Free Trial](https://www.ecomengine.com/trial) ** ** ** [Free Trial](https://www.ecomengine.com/trial) ** ** ** [![FeedbackFive icon](https://www.ecomengine.com/hubfs/images/decorative/illustrations/nav-icons/feedbackfive-star-svg.svg "FeedbackFive icon") FeedbackFive Request Amazon Reviews and Feedback ](https://www.ecomengine.com/feedbackfive) 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Simplify FBA Inventory Management ](https://www.ecomengine.com/restockpro) #### FeedbackFive Features [| ![single-star](https://www.ecomengine.com/hubfs/images/decorative/illustrations/nav-icons/feedbackfive-envelop-svg.svg) | Review Automation Send automated review requests or customize your own message | | --- | --- | ](https://www.ecomengine.com/feedbackfive/automation) | ![single-star](https://www.ecomengine.com/hubfs/images/decorative/illustrations/nav-icons/feedbackfive-bells-svg.svg) | Review Monitoring Quickly identify review trends | | --- | --- | [| ![single-star](https://www.ecomengine.com/hubfs/images/decorative/illustrations/nav-icons/feedbackfive-alert-svg.svg) | Listing Alerts Monitor your Amazon listings and reputation 24/7 | | --- | --- | ](https://www.ecomengine.com/feedbackfive/alerts) [| ![single-star](https://www.ecomengine.com/hubfs/images/decorative/illustrations/nav-icons/feedbackfive-analytics-svg.svg) | Analytics & Reporting Analyze sales trends and brand 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Search **Menu** ** ** [Log In](https://www.ecomengine.com/login) [Free Trial](https://www.ecomengine.com/trial) --- Join Our Email List - Receive our monthly newsletter. - Stay up to date on Amazon policies. - Get tips to grow your business. # The Ins and Outs of Inventory Data Management [![Cyndi Thomason](https://www.ecomengine.com/hubfs/images/headshots/external/cyndi-thomason.jpg)](https://www.ecomengine.com/blog/author/cyndi-thomason) By [Cyndi Thomason](https://www.ecomengine.com/blog/author/cyndi-thomason) As a [bookkeeping firm](https://www.bookskeep.com/), we spent January completing financial statements for our clients. Because we strive for accuracy all year long, the year-end isn't much different than month-end except it's critically important that we have inventory right because of tax implications. And guess what, there are always challenges! If you struggled with getting your inventory right for this year-end or if inventory is mysterious to you, let's dive into some of the steps you can take now to get a handle on your inventory data. After all, if you don't know your inventory and its relationship to cost of goods sold (COGS), then you are guessing at your profitability. Here are a few best practices for better inventory data management. ## How to Stay on Top of Inventory Data Management I recall a chat with my accountant friend Michelle. I was explaining how much trouble some of our newer clients had with inventory management. She laughed and said in her practice she knew where to find the answers to all the inventory questions. I leaned in, ready for this nugget. She said all the answers are written on the ceiling of her office. What? She explained, “Whenever I ask clients a question about their inventory, they look at the ceiling and give me an answer.” Oh, she had no gold nugget either, just a great anecdote. To improve your inventory data management, we recommend [recording COGS](https://www.ecomengine.com/blog/profit-first-overview) every month based on the products sold. This will capture most of your activity correctly. We also recommend that you true up to an actual inventory value each quarter. In non-accounting terms, this basically means you must reconcile your balances. If you complete a count of your inventory at the end of each quarter and apply the same product value that you use to value your COGS, then any discrepancy you find needs to be a true-up adjustment to Inventory and COGS each quarter. ## Why Is Your Entry Off? ![Calculator](https://www.ecomengine.com/hs-fs/hubfs/images/decorative/illustrations/calculator.png?width=200&name=calculator.png)There are many reasons the straight COGS entry can be off, such as lost, damaged, or stolen products. You may also have products that you have prepaid out of Inventory and not yet received the goods. You could have terms with your vendor and have received product that you have not paid for. ***Related reading: ***[***Tips for Monitoring Your Total Inventory Value***](https://www.ecomengine.com/blog/total-inventory-value) As your business gets more complicated, you will want to understand all these moving parts to ensure the accuracy of your financial records. It is disheartening to work all year thinking your profitability is at one level, only to do a year-end inventory adjustment and wipe it all off the books. Or, the better situation of writing up your inventory and reducing your COGS to show you have much more profit than expected, which comes with a tax burden you haven’t prepared for. eComEngine's RestockPro software can also give you greater visibility into your profitability at the product level. Download the tool's [SKU Profitability Report](https://www.ecomengine.com/blog/sku-profitability) to see a list of your SKUs with their sales, estimated profitability, and purchase history for any designated time period. It's that simple - and seriously helpful. ## Six Ways to Get Good Inventory Data Getting good inventory practices in place will give you good inventory data all year when you're making operational decisions. The added benefit is that tax time is a breeze, it's just like every quarter-end. I know you're ready to dive in, so we've created a guide that will help you understand these six common concerns about inventory data management: 1. How inventory works on the Balance Sheet and the P&L 2. What needs to be included in unit cost calculations 3. What should be expensed directly to the P&L 4. Best practices for tracking inventory on a spreadsheet 5. Considerations for using an inventory software tool 6. Advanced inventory issues [Download the Inventory Basics guide](https://info.bookskeep.com/free-inventory-basics-ebook) and get started. Your ability to grow your profits and your business depends on you managing your inventory with skill and confidence. [![Stack of boxes next to laptop with text, "Improve FBA inventory management" above button with text, "Learn more"](https://no-cache.hubspot.com/cta/default/5147382/922b2375-3d4e-4c0f-8daf-f8dc14b1846a.png)](https://cta-redirect.hubspot.com/cta/redirect/5147382/922b2375-3d4e-4c0f-8daf-f8dc14b1846a) ![newsletter-email-laptop](https://no-cache.hubspot.com/cta/default/5147382/interactive-177527396632.png) ![newsletter-email-laptop](https://no-cache.hubspot.com/cta/default/5147382/interactive-177527396632.png) Originally published on March 9, 2022, updated March 19, 2025 This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes. ## You May Also Like These Stories on Inventory [![An illustration of an empty box shelf on one side and an overflowing box shelf on the other, with the text "Prime Day Is in June."](https://www.ecomengine.com/hubfs/images/featured/blog/prime-day-june.png) ](https://www.ecomengine.com/blog/prime-day-fba-inventory-triage) ### [Prime Day Is in June: The Last-Mile Readiness Plan Amazon Sellers Need Now](https://www.ecomengine.com/blog/prime-day-fba-inventory-triage) June 15, 2026 | [![Inventory Cash Flow"Illustration of stacked inventory boxes with trapped cash and an empty wallet, titled "Inventory Cash Flow"](https://www.ecomengine.com/hubfs/images/featured/blog/inventory-cash-flow.png) ](https://www.ecomengine.com/blog/amazon-inventory-cash-flow) ### [Inventory Cash Flow: The Hidden Reason Your Business Feels “Successful but Broke”](https://www.ecomengine.com/blog/amazon-inventory-cash-flow) May 19, 2026 | [![Illustration of three Amazon dead inventory strategies on a warehouse shelf, liquidate, bundle, and hold, with storage cost coins below, titled “Dead Inventory Detox.”](https://www.ecomengine.com/hubfs/images/featured/blog/dead-inventory-detox.png) ](https://www.ecomengine.com/blog/amazon-dead-inventory-guide) ### [Dead Inventory Detox: When to Liquidate, When to Bundle, When to Hold](https://www.ecomengine.com/blog/amazon-dead-inventory-guide) April 14, 2026 | ## No Comments Yet Let us know what you think ### eComEngine 14321 Winter Breeze Drive Suite 121 Midlothian, VA 23113 Call us: [800-757-6840](tel:800-757-6840) Company Legal Software Resources [![GS1 US Channel Partner](https://www.ecomengine.com/hubfs/images/partners/logos/gs1-us-channel-partner.png "GS1 US Channel Partner")](https://www.ecomengine.com/get-gtin-amazon) ![Amazon Marketplace Developer Council Founding Member](https://www.ecomengine.com/hubfs/brand-identity/logos/amazon/amazon-marketplace-developer-council-optimized.png "Amazon Marketplace Developer Council Founding Member") ![Amazon Web Services](https://www.ecomengine.com/hubfs/brand-identity/logos/amazon/amazon-web-services.svg "Amazon Web Services") ![Amazon Selling Partner Appstore Software Partner badge](https://www.ecomengine.com/hubfs/brand-identity/logos/amazon/amazon-software_partners-badge.png "Amazon Selling Partner Appstore Software Partner badge") ![Amazon Marketplace Developer Council Founding Member](https://www.ecomengine.com/hubfs/brand-identity/logos/amazon/amazon-marketplace-developer-council-optimized.png "Amazon Marketplace Developer Council Founding Member") ![Amazon Web Services](https://www.ecomengine.com/hubfs/brand-identity/amazon-web-services.svg "Amazon Web Services") Copyright© 2007-2026 eComEngine, LLC. 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Our [privacy policy](https://www.ecomengine.com/privacy-policy) has more details.* ```json { "@context" : "http://schema.org", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Midlothian", "addressRegion" : "VA", "postalCode" : "23113", "streetAddress" : "14321 Winter Breeze Drive Suite 121" }, "alternateName" : "eComEngine, LLC", "description" : "Amazon Seller Tools", "email" : "info@ecomengine.com", "image" : "https://www.ecomengine.com/hubfs/images/decorative/illustrations/amazon-seller-tools.png", "logo" : "https://www.ecomengine.com/hubfs/brand-identity/logos/ecomengine-logos/ecomengine-logo-stacked.png", "naics" : "511210", "name" : "eComEngine, LLC", "sameAs" : [ "https://www.facebook.com/eComEngine/", "https://twitter.com/eComEngine" ], "telephone" : "800-757-6840", "url" : "https://www.ecomengine.com" } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Cyndi Thomason" }, "dateModified" : "2025-03-19", "datePublished" : "2022-03-09", "description" : "Cyndi Thomason shares best practices for inventory data management and how incorporating these tips will help you not just at tax time, but all year long.", "headline" : "The Ins and Outs of Inventory Data Management", "image" : { "@type" : "ImageObject", "url" : "https://www.ecomengine.com/hubfs/images/featured/blog/inventory-data-management.png" }, "mainEntityOfPage" : { "@id" : "https://www.ecomengine.com/blog/inventory-data-management", "@type" : "WebPage", "description" : "Cyndi Thomason shares best practices for inventory data management and how incorporating these tips will help you not just at tax time, but all year long." }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.ecomengine.com/hubfs/brand-identity/logos/ecomengine-logos/ecomengine-logo-stacked.png" }, "name" : "eComEngine, LLC" } } ```