Choose your...

Country Language
Don't miss out
Subscribe to QuickBooks for only
$1/month for 3 months
Don't miss out
Claim now
April Sale
Buy now and pay only $1/month
for your first 3 months
March into savings Don't miss out!
$1 /monthfor 3 months
Track your expenses as you go and save 11 hours of admin per week
QuickBooks Online $1 /monthfor 3 months
Start fresh this new year
with QuickBooks Online
$1 /monthfor 3 months
Sale ends soon. Don't miss out, sign up today
$1 /monthfor 3 months
Start fresh this new year
with QuickBooks Online
$1 /monthfor 3 months
$1/month
for 3 months
$1/month
for 12 months
When purchased in bundles of 10
50 %off for 3 months
50 %off for 12 months
  • Invoices
  • Expenses
  • Reports

What is Inventory?

Inventory (Definition)

Inventory is also known as stock, and it refers to the raw materials your business uses in production or has to sell. Your inventory is one of the most important sources of revenue generation and, as a result, one of the most important sources of profitability for shareholders. A company's inventory can be divided into three main categories: raw materials, finished commodities, and work in progress. Raw materials are the materials used by a company to create products, such as material to create shirts. Finished products are those that are complete and ready to sell. Work in progress refers to products along the production line, such as raw materials, packing materials and even labour.

Inventory is valued in three ways. The First-In, First-Out technique means the value of products sold is based on the cost of the materials that were purchased first. Last in, first out is when the cost of goods sold is valued using the cost of the most recent purchased materials. While the weighted average method is when inventory value is based on the average cost of all materials purchased during the reporting period.

Ready to run your business better with QuickBooks Online?