Track inventory: quantity on hand and cost of goods sold

Products & services come in three types. Inventory items are counted: TallyPip tracks how many you have and what they cost. Non-inventory items are products you buy or sell but don't count, like supplies. Services are work you do.

Add an inventory item

1. 1Go to Sales & Get Paid › [Products & services](/sales/products), press New and choose Inventory.
2. 2Give it a name and, if you like, a SKU.
3. 3Enter the initial quantity on hand, the as of date you counted it, and the initial cost of one (it starts the same as the item's Cost). The form shows the starting value: quantity × initial cost (it goes to Opening Balance Equity). To correct it later, edit the item and change the initial cost; changing the usual Cost doesn't change it.
4. 4Add a reorder point to be warned when stock runs low, the sales price, and a preferred vendor for reordering.

Pick the as of date carefully: transactions before it don't change the item's quantity.

Inactive and deleting

The ▾ next to Edit on each item has Make inactive: it leaves your lists and pickers, and old transactions keep it (Inactive at the top of the list shows those, with Make active). Delete appears only for an item that has never been used on any transaction and has no starting stock; anything with history can only be made inactive, so your books stay complete. Duplicate makes a copy to change.

Buying and selling

On a bill, expense or vendor credit, add the item under Item details with a quantity and rate: stock comes in (or goes back to the vendor) and its value goes to Inventory Asset. When you send an invoice or save a sales receipt, stock goes out and what it cost moves to Cost of Goods Sold. Drafts and estimates don't change stock; voiding puts it back. Credit memos and refund receipts bring items back into stock.

Costs follow first in, first out: a sale uses the oldest units first. You can sell more than you have (the invoice warns you): the missing units are costed at the last price you paid, and corrected when the stock arrives.

Reorder

Products & services shows Low stock and Out of stock at the top (tap one to see just those items). Choose Reorder from the ▾ next to an item's Edit to start a purchase order to its preferred vendor. When the goods arrive, turn the order into a bill and the stock comes in.

Counts and damaged stock

Choose Create › Inventory qty adjustment (or Adjust quantity on Products & services). Pick the item and type the new quantity you counted, or the change. Units taken off are valued at their cost and go to Inventory Shrinkage (or another account you choose). Past adjustments on Products & services lists them.

Reports

• [Inventory valuation summary](/reports/inventory-valuation-summary): quantity, value and average cost of each item on any date. It matches Inventory Asset on your balance sheet.
• [Inventory valuation detail](/reports/inventory-valuation-detail): every purchase, sale and adjustment, with the running quantity and value.
• [Physical inventory worksheet](/reports/physical-inventory-worksheet): print it and write in your count.
• [Sales by product/service summary](/reports/sales-by-product): what sold, its cost and your gross margin.

Once you close your books, TallyPip won't change inventory costs in the closed period. Date the correction after it instead.