How to Take Inventory

by Contributor; Updated September 26, 2017
Take Inventory

How to Take Inventory. Taking inventory is required for tax and business purposes, and lets you know exactly how much stock or goods you have on hand.

Items you will need

  • Accounting Advice
  • Inventory Books
  • Calculators
  • Spiral Notebooks
  • Spreadsheet Softwares
Step 1

Decide on a method of taking inventory. You can use a computer to track inventory or calculate stock or products manually.

Step 2

Take inventory at the beginning of each fiscal year for your company. This will tell you how much stock or product you are starting with (an important item for the IRS).

Step 3

Take inventory again at the end of your fiscal period.

Step 4

Subtract the amount of inventory you started with from the amount you ended up with; this is the amount of inventory used during the year.

Step 5

Count every item in your inventory - don't estimate.

Step 6

Keep track of purchases or additions to inventory made during the year.

Step 7

Identify cost of items in your inventory to determine its value. Keep all receipts and documentation for purchases.

Tips

  • Include losses of any damaged goods in your inventory for the year.