Accounting technology / Glossary / Accounting software with inventory

What is accounting software with inventory?

Definition

Accounting software with inventory tracks the quantity and value of stock items inside the ledger. When an item sells, the software moves its cost from the inventory asset account to cost of goods sold, using a costing method such as first in, first out (FIFO) or average cost.

Also calledAccounting software with stock controlInventory accounting software

Compare the softwareBest general ledger software →All 22 bookkeeping and accounting vendors →

QuickBooks Online: Plus and Advanced
Xero: Up to 4,000 tracked items
Odoo valuation: FIFO, average, LIFO, standard

Native inventory versus inventory add-ons

QuickBooks Online includes inventory tracking in its Plus and Advanced plans. Quantities update as items are bought and sold, low stock alerts flag when to reorder, and QuickBooks creates purchase orders that turn into bills when stock arrives. It offers FIFO or moving average cost, and the method cannot be changed once chosen; items created before a choice default to FIFO. Xero lets each item track quantity and value, for up to 4,000 tracked items, and records cost of goods sold at average cost each time a tracked item sells. Odoo Inventory is a full warehouse app that connects to Odoo Accounting, with FIFO, average price, LIFO and standard price valuation under perpetual or periodic inventory, plus multi-warehouse stock, lots, serial numbers, barcodes and replenishment rules. Zoho Inventory adds multi-warehouse stock and reorder points per item, and updates Zoho Books at the same time. A business that outgrows basic ledger inventory adds an inventory app or moves to an ERP with warehouse management built in.

Common questions

Does QuickBooks Online have inventory?+

Yes, in QuickBooks Online Plus and Advanced. It tracks quantities on hand, sends low stock alerts, creates purchase orders and costs stock by FIFO or moving average cost.

Does Xero have inventory?+

Yes. Xero tracks quantity and value for up to 4,000 items and records cost of goods sold at average cost each time a tracked item sells.

What costing method should I use for inventory?+

FIFO treats the first units bought as the first sold; average cost spreads the cost of all units evenly. QuickBooks Online fixes the method once chosen, so pick it before creating items.

What are inventory features in accounting software?+

Stock levels per item, cost of goods sold posted on each sale, a costing method, reorder alerts and purchase orders. ERPs such as Odoo add warehouses, lots, serial numbers and barcodes.