Setting Up Inventory Tracking

To set up inventory tracking, you must complete these three tasks:

1. Activate inventory integration.
2. Select the inventory management method.
3. Select default inventory GL Accounts.

Activate Inventory Integration

1. Navigate to Menu > System Admin > Preferences > Fulfillment.
2. In the Inventory section, mark the flag for Enable inventory integration.
   

Select the Inventory Management Method

1. Navigate to Menu > Accounting > Preferences > Data Entry.
2. Under the Inventory section, click the COGS Method dropdown list and select the appropriate option:
   • LIFO (last in / first out) — Often results in slightly reduced profits, but correspondingly lower tax rates.
   • FIFO (first in / first out) — Typically results in additional profits, if the costs of items consistently increase.
     Note: For special order, lot tracked, and serialized items, the COGS Method generally does not apply. Instead, specific items are received and shipped.
     

Select the Default Inventory GL Accounts

1. Navigate to Menu > Accounting > Preferences > Chart of Accounts.
2. In the Assets section, click the dropdown for Default Inventory Account and select a default account.
3. In the Liabilities section, click the dropdown for Accrued Inventory and select a default account.