{"id":1157,"date":"2024-11-28T05:00:00","date_gmt":"2024-11-28T05:00:00","guid":{"rendered":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/"},"modified":"2026-02-27T12:55:03","modified_gmt":"2026-02-27T12:55:03","slug":"beginning-inventory","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","title":{"rendered":"How to Find Beginning Inventory: Tips + Formula to Calculate"},"content":{"rendered":"\n<div class=\"wp-block-shipbob-blocks-single-toc single-toc\" data-controller=\"blog-toc-controller\" data-action=\"scroll@window-&gt;blog-toc-controller#scrollChanged:passive\" id=\"toc-component\"><div class=\"single-toc-overview\"><p>Table of Contents<\/p><div class=\"single-toc-read-time\"><p>** Minutes<\/p><\/div><\/div>\n<p><a href=\"#what-is-beginning-inventory\">What is beginning inventory?<\/a><\/p>\n\n\n\n<p><a href=\"#importance-of-knowing-beginning-inventory\">The importance of knowing your beginning inventory<\/a><\/p>\n\n\n\n<p><a href=\"#h-where-and-when-to-use-beginning-inventory\">Where and when to use beginning inventory?<\/a><\/p>\n\n\n\n<p><a href=\"#h-beginning-inventory-formula-what-you-ll-need\">Beginning inventory formula: what you\u2019ll need<\/a><\/p>\n\n\n\n<p><a href=\"#h-beginning-inventory-calculator\">Beginning inventory calculator<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-calculate-beginning-inventory\">How to calculate beginning inventory<\/a><\/p>\n\n\n\n<p><a href=\"#examples\">Beginning inventory calculation examples<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-find-beginning-inventory-when-using-multiple-warehouses\">How to find beginning inventory when using multiple warehouses<\/a><\/p>\n\n\n\n<p><a href=\"#h-get-started-with-shipbob\">Get started with ShipBob<\/a><\/p>\n\n\n\n<p><a href=\"#h-beginning-inventory-faqs\">Beginning inventory FAQs<\/a><\/p>\n<\/div>\n\n\n\n<p>If you start out a quarter with more inventory than when you started the previous quarter, is it a good thing or a bad thing?<\/p>\n\n\n\n<p>It could mean you stocked up in preparation for a big sale or rise in demand. Or, it\u2019s an indication that you have more inventory than you can sell.<\/p>\n\n\n\n<p>If you start out with less inventory than the period prior, it could mean you sold a lot of your stock \u2014 congratulations! Or, it\u2019s a sign you\u2019re facing issues at some link in your <a href=\"https:\/\/www.shipbob.com\/blog\/retail-supply-chain\/\">retail supply chain<\/a> and don\u2019t have enough stock available.<\/p>\n\n\n\n<p>Inventory fluctuations happen for different reasons and are very normal. That\u2019s why calculating your beginning inventory is so important for financial stability, <a href=\"https:\/\/www.shipbob.com\/blog\/demand-forecasting\/\">demand forecasting<\/a>, inventory calculations, updating your balance sheets, and much more.<\/p>\n\n\n\n<p>Let\u2019s jump into what beginning inventory is and how to easily calculate it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-beginning-inventory\">What is beginning inventory?<\/h2>\n\n\n\n<p>Beginning inventory, or opening inventory, is the total value of items a business has in stock that are ready to sell or be used at the start of an accounting period. This amount of inventory should equal the same amount of <a href=\"https:\/\/www.shipbob.com\/blog\/ending-inventory\/\">ending inventory<\/a> from the prior accounting period.&nbsp;<\/p>\n\n\n\n<p>It&#8217;s important for brands to track beginning inventory so they can manage stock levels and on-hand inventory, and make informed decisions about purchasing more inventory.&nbsp;<\/p>\n\n\n\n<p>Beginning inventory looks different for manufacturers and for retailers. For a manufacturer, beginning inventory may include raw materials, items that are in production, and finished goods. However, a retailer\u2019s beginning inventory is made up of products that are available for consumers to purchase.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-formula-to-calculate-beginning-inventory-what-you-ll-need\">Formula to calculate beginning inventory (+ what you&#8217;ll need)<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" height=\"278\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=1280px\" alt=\"\" class=\"wp-image-10914\" style=\"width:800px;height:auto\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/01\/c669c686a9b39a5bb36161e159d55c08-700x278.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p>Before you begin calculating beginning inventory, you&#8217;ll need to find the values to solve the equation. Whether you\u2019re using a <a href=\"https:\/\/www.shipbob.com\/blog\/perpetual-inventory-system\/\">perpetual inventory system<\/a> or the <a href=\"https:\/\/www.shipbob.com\/blog\/periodic-inventory-system\/\">periodic inventory method<\/a>, the following supporting formulas often coincide with calculating the beginning inventory of an accounting period.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-cogs\">COGS<\/h3>\n\n\n\n<p>To calculate the cost of goods sold (<a href=\"https:\/\/www.shipbob.com\/blog\/cost-of-goods-sold\/\">COGS<\/a>) at the end of an accounting period, you can use the records from your previous accounting period.<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-blog-highlight blog-highlight\">\n<p class=\"has-text-align-center has-medium-font-size\"><strong><strong><strong>Cost of Goods Sold (COGS) = <\/strong><\/strong><\/strong><\/p>\n\n\n\n<p class=\"has-text-align-center has-medium-font-size\"><strong><strong><strong>(Beginning Inventory + Purchases) \u2013 Closing Inventory<\/strong><\/strong><\/strong><\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-ending-inventory-from-prior-financial-period\">Ending inventory from prior financial period<\/h3>\n\n\n\n<p>Your accounting records from the prior financial period help you determine where you left off. In other words, your ending inventory from Q3 is your beginning inventory in Q4.<\/p>\n\n\n\n<p>If this is your first time calculating ending inventory, you will need to determine how much new stock was purchased and sold in a period of time.<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-blog-highlight blog-highlight\">\n<p class=\"has-text-align-center has-medium-font-size\"><strong><strong>Ending Inventory = Beginning Inventory + Net Purchases \u2013 COGS<\/strong><\/strong><\/p>\n<\/div>\n\n\n\n<p id=\"calculate\"><strong>Note: <\/strong>Choosing the right <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-valuation-methods\/\">inventory valuation<\/a> method for your ending and beginning inventory is crucial for maintaining a financially strong balance sheet. Inventory can be valued using methods such as LIFO (last-in first-out), FIFO (first-in first-out), and even <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-weighted-average\/\">inventory weighted average<\/a>.<\/p>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>Now you can calculate beginning inventory in four easy steps.&nbsp;<\/strong><\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-blog-highlight blog-highlight\">\n<p class=\"has-text-align-center has-medium-font-size\"><strong>Beginning Inventory Formula = (COGS + Ending Inventory) \u2013 Purchases<\/strong><\/p>\n<\/div>\n\n\n\n<p class=\"is-style-blog\"><\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Step 1.<\/strong> Determine the COGS with the help of your previous accounting period\u2019s records.&nbsp;To calculate the cost of goods sold at the end of an accounting period, you can use the records from your previous accounting period. Find the COGS formula above.<\/li>\n\n\n\n<li><strong>Step 2. <\/strong>Next, multiply your ending inventory balance with how much it costs to produce each item, and do the same with the amount of new inventory.<\/li>\n\n\n\n<li><strong>Step 3. <\/strong>Calculate the ending inventory and cost of goods sold.<\/li>\n\n\n\n<li><strong>Step 4. <\/strong>Finally, subtract the amount of inventory purchased from your result, and you\u2019ll get your beginning inventory.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-beginning-inventory-calculator\">Beginning inventory calculator<\/h2>\n\n\n\n<div class=\"iframe-embed aligncenter\">\n  \n  \n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"importance-of-knowing-beginning-inventory\">The importance of knowing your beginning inventory<\/h2>\n\n\n\n<p>There are various benefits to knowing your beginning inventory. Consider the following:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Transparency&nbsp;<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Your beginning inventory tells you how much inventory you have to work with, and how much inventory you need to order to avoid stockouts. Beginning inventory can also be used to calculate how much merchandise was sold during a given period.<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Improved forecasting<\/strong><\/li>\n<\/ol>\n\n\n\n<p>When you know how much inventory you have at the beginning of an accounting period, you can make smarter purchasing decisions based on your forecasted demand for the remainder of that period.&nbsp;This is especially helpful prior to <a href=\"https:\/\/www.shipbob.com\/blog\/peak-shipping-season\/\">peak season<\/a> or to prepare for <a href=\"https:\/\/www.shipbob.com\/blog\/seasonal-demand\/\">seasonal demand<\/a>.<\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Better inventory management<\/strong><\/li>\n<\/ol>\n\n\n\n<p>By knowing your beginning inventory at the start of an accounting period, you\u2019re better able to identify inventory that is at risk of becoming \u201cdead stock\u201d by keeping track of the inventory that\u2019s at risk of being no longer sellable. Additionally, you\u2019ll have a better understanding of your inventory levels so you can avoid stockouts.&nbsp;<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Helps determine COGS<\/strong><\/li>\n<\/ol>\n\n\n\n<p>In order to calculate your cost of goods sold, or COGS, you need to know your beginning inventory. Your COGS is the amount of products sold in a period of time, minus beginning inventory. Understanding both of these metrics allows you to know the cost of producing and selling your products.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"value-inventory\">How to value inventory<\/h3>\n\n\n\n<p>Choosing the right <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-valuation-methods\/\">inventory valuation<\/a> method for your ending and beginning inventory is crucial for maintaining a financially strong balance sheet. There are multiple valuation methods that can be used depending on business size and needs. Here are 4 inventory valuation methods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">1. Weighted average cost (WAC)&nbsp;&nbsp;<\/h4>\n\n\n\n<p>Also known as the average cost method, this method of valuation is good for businesses that ship packages of similar sizes. The formula is as follows:<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-blog-highlight blog-highlight\">\n<p><strong>Weighted Average Cost = Cost of Goods Available for Sale \/ Total Units in Inventory<\/strong><\/p>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">2. Specific identification method<\/h4>\n\n\n\n<p>This tends to be the most accurate method since every single item is tracked individually. This method is best for businesses with products that vary greatly in size and value. There is no formula for this method, all you need to do is tag each and every item with its purchase value and incurred value until it is sold.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">3. First-in first-out (FIFO)<\/h4>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/blog\/fifo\/\">FIFO<\/a> is a commonly used valuation method since it is simple to use. As the name implies, inventory that is produced first will seemingly be sold first. With this method you can calculate value based on the inventory you have on hand.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">4. Last-in first-out (LIFO)<\/h4>\n\n\n\n<p id=\"where\"><a href=\"https:\/\/www.shipbob.com\/blog\/lifo\/\">LIFO<\/a> is less common and not the most practical since most businesses wouldn&#8217;t want to sell their newest products first. However, there are tax advantages. The end result of LIFO means higher COGS and lower balance of remaining inventory, which means less taxes, which means more cash flow.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-where-and-when-to-use-beginning-inventory\">Where and when to use beginning inventory?<\/h2>\n\n\n\n<p>Beginning inventory is an important aspect of <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-accounting\/\">inventory accounting<\/a> that you\u2019ll need to use to measure and track your business&#8217;s performance.<\/p>\n\n\n\n<p>Here are common uses for beginning inventory. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To identify shrinkage<\/h3>\n\n\n\n<p>Beginning inventory can help identify any possible <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-shrinkage\/\">inventory shrinkage<\/a>.<\/p>\n\n\n\n<p>Because beginning inventory is reconciled with the last period\u2019s ending inventory, you can determine whether there are discrepancies like inventory loss or tracking and recording errors.&nbsp;<\/p>\n\n\n\n<p>When you regularly track your beginning inventory (as well as ending inventory), you have a reference point of appropriate stock levels and can hone in on outstanding issues if they arise. These issues may include theft, damage, mismanagement, or reporting inaccuracy.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To determine average inventory for an accounting period<\/h3>\n\n\n\n<p>Beginning inventory provides a foundation for tracking, calculating, and understanding the inventory count for an accounting period. Not only does beginning inventory help determine <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-turnover-ratio\/\">inventory turnover rate<\/a>, but it can also determine the total amount of products available for sale during the accounting period.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To help understand your business&#8217;s financial health<\/h3>\n\n\n\n<p>Keeping track of your business\u2019s beginning inventory helps you keep a finger on the pulse of your brand\u2019s financial health, make informed decisions, and drive sustained growth and profitability.&nbsp;<\/p>\n\n\n\n<p>For example, beginning inventory is an important factor when calculating working capital, which are the funds available for operating expenses. Your beginning inventory can help you understand the impact of your inventory cost on available working capital. As a result, you can make decisions about inventory levels and cash flow so you can ensure you have enough stock to meet demand.&nbsp;<\/p>\n\n\n\n<p>Additionally, when you accurately track your inventory, you can keep better balance sheets. Balance sheets are important because they provide a holistic picture of your business\u2019s financial health to investors and stakeholders. Because inventory is often the largest asset an ecommerce business has, it is important accurate inventory documentation is important.&nbsp;<\/p>\n\n\n\n<p>Plus, tracking beginning inventory helps with <a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-guide-bookkeeping\/\">ecommerce bookkeeping<\/a> in these other ways:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Conduct <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-reconciliation\/\">inventory reconciliations<\/a> and track <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-write-off\/\">inventory write-offs<\/a> when inventory has lost its value and cannot be sold due to damage, theft, loss, or decline in market value.<\/li>\n\n\n\n<li>Determine future production and <a href=\"https:\/\/www.shipbob.com\/blog\/reorder-quantity-formula\/\">reorder quantities<\/a> so you\u2019re not stuck with too much or too little stock.<\/li>\n\n\n\n<li>Knowing your beginning inventory helps determine the tax deductions from your stock. Having too large of a beginning inventory, or one that\u2019s too small, can be detrimental for your taxes.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"examples\">Beginning inventory calculation examples<\/h2>\n\n\n\n<p>The easiest way to understand this formula is by walking through an example.<\/p>\n\n\n\n<p>Let\u2019s say you sold 1,000 refrigerators during the last accounting period, and you purchased each one for $500 from the supplier. The cost of goods sold is:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Manufacturing Price x Quantity = COGS<\/strong><\/p>\n\n\n\n<p>$500 x 1,000 = $500,000<\/p>\n<\/blockquote>\n\n\n\n<p>Now, let\u2019s say at the end of the period, you have 500 refrigerators left. This means the ending inventory is worth:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Manufacturing Price x Remaining Quantity = Ending Inventory<\/strong><\/p>\n\n\n\n<p>$500 x 500 = $250,000<\/p>\n<\/blockquote>\n\n\n\n<p>Furthermore, if your business produced or purchased an additional 700 refrigerators in the new year, the cost of the new inventory is:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Manufacturing Price x Quantity = Purchases<\/strong><\/p>\n\n\n\n<p>$500 x 700 = $350,000<\/p>\n<\/blockquote>\n\n\n\n<p>Thus, we can now calculate beginning inventory using the formula:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>(COGS + Ending Inventory) \u2013 Purchases<\/strong><\/p>\n\n\n\n<p>($500,000 + $250,000) \u2013 $350,000 = $400,000<\/p>\n<\/blockquote>\n\n\n\n<p id=\"find\">This means the beginning inventory is $400,000 at the start of the accounting period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-find-beginning-inventory-when-using-multiple-warehouses\">How to find beginning inventory when using multiple warehouses<\/h2>\n\n\n\n<p>Large businesses that are shipping a high volume of orders across regions often grow out of <a href=\"https:\/\/www.shipbob.com\/blog\/centralized-inventory\/\">centralised inventory<\/a>, and opt instead for a \u2018distributed\u2019 inventory system \u2014 in which inventory is divided up and stored in a number of <a href=\"https:\/\/www.shipbob.com\/blog\/differences-warehouse-fulfillment-center\/\">fulfilment centres<\/a> in various locations. This can help speed up the order delivery process and save on <a href=\"https:\/\/www.shipbob.com\/ecommerce-shipping\/calculate-shipping-costs\/\">shipping costs<\/a>.<\/p>\n\n\n\n<p>The good news is that using multiple warehouses doesn\u2019t have to make finding the beginning inventory in each tricky. With a tech-enabled <a href=\"https:\/\/www.shipbob.com\/3pl\/\">third-party logistics<\/a> (3PL) company like ShipBob, you can log in to your <a href=\"https:\/\/www.shipbob.com\/inventory-management\/\">inventory management<\/a> system and access real-time inventory counts.<\/p>\n\n\n\n<p>ShipBob\u2019s software fully integrates with your other business systems and gives you direct insight into <a href=\"https:\/\/www.shipbob.com\/blog\/warehousing\/\">warehousing<\/a> and specific information down to the SKU and unit level, from one central dashboard.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"ShipBob Fulfillment Center Guided Tour - 3D 360\u00b0 VR Video\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/YdTbM4XlizY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>You can view not only the beginning inventory numbers and <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-days-on-hand\/\">inventory days on hand<\/a> but <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-forecasting\/\">inventory forecasting<\/a> tools, insights into managing <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-turnover-ratio\/\">inventory turnover<\/a>, and much more.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion\">Easily manage your inventory with ShipBob<\/h2>\n\n\n\n<p>Determining your beginning inventory at the end of each accounting period can be time-consuming if you don\u2019t have a good system for <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\">tracking inventory<\/a> in place.<\/p>\n\n\n\n<p>With ShipBob, you can compute your beginning inventory in no time, without requiring staff to perform an <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-audit\/\">inventory audit<\/a> or a physical count of the products. ShipBob not only stores products and picks, packs, and <a href=\"https:\/\/www.shipbob.com\/blog\/kitting\/\">kits<\/a> orders for you, but our <a href=\"https:\/\/www.shipbob.com\/inventory-management\/software\/\">inventory management software<\/a> monitors inventory levels across multiple warehouses, making it an easy choice for fast-growing ecommerce businesses.<\/p>\n\n\n\n<p>View historical <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-levels\/\">inventory levels<\/a> by changing filters to the date range of your choice, filter down to the product or lot level, view status by channel sold on, and more.<\/p>\n\n\n\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-14371\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=1280px\" alt=\"inventory summary and turnover from ShipBob's analytics tool\" width=\"811\" height=\"372\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2020\/06\/inventory-summary-and-turnover-from-ShipBobs-analytics-tool-700x321.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cI felt like I couldn\u2019t grow until I moved to ShipBob. Our old 3PL was slowing us down. Now I am encouraged to sell more with them. My CPA even said to me, \u2018Thank God you switched to ShipBob.\u2019 ShipBob provides me clarity and insight to help me make business decisions when I need it, along with responsive customer support.\u201d<\/p>\n\n\n\n<p><em>Courtney Lee, Founder of <a href=\"https:\/\/www.shipbob.com\/blog\/prymal\/\">Prymal<\/a><\/em><\/p>\n<\/blockquote>\n\n\n\n<p id=\"faq\">Connect with a ShipBob fulfilment expert to learn how we make inventory management and <a href=\"https:\/\/www.shipbob.com\/blog\/order-fulfillment\/\">order fulfilment<\/a> even easier for your ecommerce business and get a custom quote.<\/p>\n\n\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Request Fulfilment Pricing<\/strong><\/a><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-have-your-own-warehouse\">Have your own warehouse?<\/h2>\n\n\n\n<p>If you&#8217;re fulfilling orders in-house and need a warehouse management system to help you better track inventory, connect with our team to find out if our WMS is the right solution for you. <\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote-plus\/\" target=\"_blank\" rel=\"noreferrer noopener\">Request WMS Quote<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-beginning-inventory-faqs\">Beginning inventory FAQs<\/h2>\n\n\n\n<p>Determining your beginning inventory is an important task for ecommerce stores. The following information answers some frequently asked questions about beginning inventory.<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is opening\/closing inventory?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n<p>Opening inventory, also known as beginning inventory, is the value of inventory that is carried forward from the previous accounting period and is used to compute the average inventory. It also helps to determine cost of goods sold. Closing inventory (also known as ending inventory) is the value of the stock at the end of the accounting period.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What counts as purchases?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n<p>In the context of inventory, purchases include <a href=\"https:\/\/www.shipbob.com\/blog\/raw-materials-inventory\/\">raw materials<\/a> bought for production (also called <a href=\"https:\/\/www.shipbob.com\/blog\/production-inventory\/\">production inventory<\/a>), <a href=\"https:\/\/www.shipbob.com\/blog\/finished-goods-inventory\/\">finished goods inventory<\/a> bought from a supplier, and any equipment acquired throughout the manufacturing process.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How do I calculate COGS?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n<p>You can calculate the cost of goods sold from the records documented during your previous accounting period. To calculate this, add the beginning inventory value to purchases during the period, and then subtract the ending inventory from this sum. The result is the cost of goods sold (COGS).<\/p>\n\n\n\n<p>The COGS formula is <strong>Manufacturing Price x Quantity = COGS<\/strong>.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">Is beginning inventory a current asset?<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\" \/><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n<p>Yes, beginning inventory is considered a current asset. Current assets are accounts that track what a company owns and uses in a year, which makes beginning inventory a current asset. <\/p>\n<\/div><\/div><\/div>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and more. <\/p>\n","protected":false},"author":193,"featured_media":26255,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[6,7,8],"class_list":["post-1157","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogcategories-ecommerce-tips","blogcategories-fulfillment","blogcategories-inventory"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Beginning Inventory? Formula + Free Calculator<\/title>\n<meta name=\"description\" content=\"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Find Beginning Inventory: Tips + Formula to Calculate\" \/>\n<meta property=\"og:description\" content=\"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/\" \/>\n<meta property=\"og:site_name\" content=\"ShipBob Australia\" \/>\n<meta property=\"article:modified_time\" content=\"2026-02-27T12:55:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"667\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"12 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/\",\"url\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/\",\"name\":\"What is Beginning Inventory? Formula + Free Calculator\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/wp-content\\\/uploads\\\/sites\\\/33\\\/2026\\\/02\\\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg\",\"datePublished\":\"2024-11-28T05:00:00+00:00\",\"dateModified\":\"2026-02-27T12:55:03+00:00\",\"description\":\"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/#breadcrumb\"},\"inLanguage\":\"en-AU\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/wp-content\\\/uploads\\\/sites\\\/33\\\/2026\\\/02\\\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg\",\"contentUrl\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/wp-content\\\/uploads\\\/sites\\\/33\\\/2026\\\/02\\\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg\",\"width\":1000,\"height\":667,\"caption\":\"A man packs knitwear into a cardboard box for delivery and sale. Casual clothes._id2560631063\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Blog\",\"item\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"How to Find Beginning Inventory: Tips + Formula to Calculate\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/#website\",\"url\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/\",\"name\":\"ShipBob Australia\",\"description\":\"Just another ShipBob Network site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-AU\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What is Beginning Inventory? Formula + Free Calculator","description":"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","og_locale":"en_US","og_type":"article","og_title":"How to Find Beginning Inventory: Tips + Formula to Calculate","og_description":"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.","og_url":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","og_site_name":"ShipBob Australia","article_modified_time":"2026-02-27T12:55:03+00:00","og_image":[{"width":1000,"height":667,"url":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"12 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","url":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","name":"What is Beginning Inventory? Formula + Free Calculator","isPartOf":{"@id":"https:\/\/www.shipbob.com\/au\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/#primaryimage"},"image":{"@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/#primaryimage"},"thumbnailUrl":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg","datePublished":"2024-11-28T05:00:00+00:00","dateModified":"2026-02-27T12:55:03+00:00","description":"Learn how to find beginning inventory, get the beginning inventory formula, walk through an example, and try our free calculator.","breadcrumb":{"@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/#breadcrumb"},"inLanguage":"en-AU","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/"]}]},{"@type":"ImageObject","inLanguage":"en-AU","@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/#primaryimage","url":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg","contentUrl":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg","width":1000,"height":667,"caption":"A man packs knitwear into a cardboard box for delivery and sale. Casual clothes._id2560631063"},{"@type":"BreadcrumbList","@id":"https:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.shipbob.com\/au\/"},{"@type":"ListItem","position":2,"name":"Blog","item":"https:\/\/www.shipbob.com\/au\/blog\/"},{"@type":"ListItem","position":3,"name":"How to Find Beginning Inventory: Tips + Formula to Calculate"}]},{"@type":"WebSite","@id":"https:\/\/www.shipbob.com\/au\/#website","url":"https:\/\/www.shipbob.com\/au\/","name":"ShipBob Australia","description":"Just another ShipBob Network site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.shipbob.com\/au\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-AU"}]}},"parsely":{"version":"1.1.0","canonical_url":"https:\/\/shipbob.com\/au\/blog\/beginning-inventory\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"WebPage","headline":"How to Find Beginning Inventory: Tips + Formula to Calculate","url":"http:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/www.shipbob.com\/au\/blog\/beginning-inventory\/"},"thumbnailUrl":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg?w=160","image":{"@type":"ImageObject","url":"https:\/\/www.shipbob.com\/au\/wp-content\/uploads\/sites\/33\/2026\/02\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg"},"articleSection":"Uncategorized","author":[{"@type":"Person","name":"Meredith Flora"}],"creator":["Meredith Flora"],"publisher":{"@type":"Organization","name":"ShipBob Australia","logo":""},"keywords":[],"dateCreated":"2024-11-28T05:00:00Z","datePublished":"2024-11-28T05:00:00Z","dateModified":"2026-02-27T12:55:03Z"},"rendered":"<script type=\"application\/ld+json\" class=\"wp-parsely-metadata\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@type\":\"WebPage\",\"headline\":\"How to Find Beginning Inventory: Tips + Formula to Calculate\",\"url\":\"http:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/\",\"mainEntityOfPage\":{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/www.shipbob.com\\\/au\\\/blog\\\/beginning-inventory\\\/\"},\"thumbnailUrl\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/wp-content\\\/uploads\\\/sites\\\/33\\\/2026\\\/02\\\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg?w=160\",\"image\":{\"@type\":\"ImageObject\",\"url\":\"https:\\\/\\\/www.shipbob.com\\\/au\\\/wp-content\\\/uploads\\\/sites\\\/33\\\/2026\\\/02\\\/d0c3189556679b2fc3b6ddcd13bbdd7c.jpg\"},\"articleSection\":\"Uncategorized\",\"author\":[{\"@type\":\"Person\",\"name\":\"Meredith Flora\"}],\"creator\":[\"Meredith Flora\"],\"publisher\":{\"@type\":\"Organization\",\"name\":\"ShipBob Australia\",\"logo\":\"\"},\"keywords\":[],\"dateCreated\":\"2024-11-28T05:00:00Z\",\"datePublished\":\"2024-11-28T05:00:00Z\",\"dateModified\":\"2026-02-27T12:55:03Z\"}<\/script>","tracker_url":"https:\/\/cdn.parsely.com\/keys\/shipbob.com\/p.js"},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/blog\/1157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/types\/blog"}],"author":[{"embeddable":true,"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/users\/193"}],"version-history":[{"count":7,"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/blog\/1157\/revisions"}],"predecessor-version":[{"id":26256,"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/blog\/1157\/revisions\/26256"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/media\/26255"}],"wp:attachment":[{"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/media?parent=1157"}],"wp:term":[{"taxonomy":"blogcategories","embeddable":true,"href":"https:\/\/www.shipbob.com\/au\/wp-json\/wp\/v2\/blogcategories?post=1157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}