16.2. Running Inventory Reports

Checking the vital signs of your inventory is the best way to keep it healthy. When products are hot, you have to keep them in stock or you'll lose sales. And, if products grow cold, you don't want to get stuck holding the bag, box, or lime green luggage. For all other temperatures, most companies keep tabs on inventory trends and compare them to what's going on in sales. For example, when the value of your inventory is increasing faster than sales, sales could be poor because your prices are too high, competition is encroaching on your market, or the Salvador Dali Chia Pets simply didn't take hold in the market.

Good inventory management means keeping enough items in stock to meet your sales, but not so many that your inventory grows obsolete before you can sell it. The inventory reports in QuickBooks aren't fancy, but they tell you most of what you need to know. You can run any of the inventory reports by choosing Reports→Inventory and then picking the report you want.