{"id":534,"date":"2023-07-07T15:32:20","date_gmt":"2023-07-07T15:32:20","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/ending-inventory\/"},"modified":"2025-11-18T14:16:55","modified_gmt":"2025-11-18T14:16:55","slug":"ending-inventory","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/ending-inventory\/","title":{"rendered":"Ending Inventory Guide: Formula, Free Calculator, &amp; Solutions for Your Online Store"},"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=\"#h-what-is-ending-inventory\">What is ending inventory?<\/a><\/p>\n\n\n\n<p><a href=\"#\">Why is ending inventory important?<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-calculate-ending-inventory-using-the-ending-inventory-formula\">The ending inventory formula<\/a><\/p>\n\n\n\n<p><a href=\"#h-ending-inventory-calculator\">Ending inventory calculator<\/a><\/p>\n\n\n\n<p><a href=\"#h-ending-inventory-methods-and-examples\">Ending inventory methods and examples<\/a><\/p>\n\n\n\n<p><a href=\"#\">How to use ending inventory<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-3pls-help-improve-ending-inventory-management\">How 3PLs help improve ending inventory management<\/a><\/p>\n\n\n\n<p><a href=\"#\">Ending inventory FAQ<\/a><\/p>\n<\/div>\n\n\n\n<p><span>When it comes to <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-accounting\/\">inventory accounting<\/a>, knowing your ending inventory is essential.<\/span><span> But calculating how much sellable inventory you have on hand at the end of an accounting period can be a challenge. That\u2019s why it\u2019s important to understand how to best calculate the value of your ending inventory and to choose the right <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/inventory-valuation-methods\/\"><span>inventory valuation method<\/span><\/a><span> for your business.<\/span><\/p>\n\n\n\n<p><span>In this article, you\u2019ll learn why ending inventory is an important factor in calculating <a href=\"https:\/\/www.shipbob.com\/blog\/cost-of-goods-sold\/\">cost of goods sold<\/a>, and how the right inventory management software can help you determine the value of your ending inventory at the end of the accounting period.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-ending-inventory\">What is ending inventory?<\/h2>\n\n\n\n<p><span>Ending inventory refers to the sellable inventory you have left over at the end of an accounting period. When a given accounting period ends, you take your <a href=\"https:\/\/www.shipbob.com\/blog\/beginning-inventory\/\">beginning inventory<\/a>, add net purchases, and subtract the cost of goods sold (COGS) to find your ending inventory\u2019s value. For a balance sheet to be complete, you\u2019ll need to claim all inventory as an asset. Knowing your ending inventory value will impact your balance sheets and your taxes, so it\u2019s important to calculate the value of your inventory correctly.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Ending inventory vs. closing inventory<\/h3>\n\n\n\n<p id=\"important\">Another name for ending inventory is closing inventory. The two terms are synonymous, as both refer to the amount of sellable inventory available at the point when a particular accounting period ends, or \u201ccloses\u201d.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why is ending inventory important?<\/h2>\n\n\n\n<p id=\"formula\">You\u2019ll always want to know much you\u2019re selling \u2014 and how much you\u2019re not selling! <a href=\"https:\/\/www.shipbob.com\/ecommerce-inventory\/\">Ecommerce inventory<\/a> can be seen as just another cost until it gets sold. In ecommerce, calculating ending inventory is a business best practice as well as an important part of the accounting process.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-ending-inventory-using-the-ending-inventory-formula\">How to calculate ending inventory using the ending inventory formula<\/h2>\n\n\n\n<p><span>The basic formula for calculating ending inventory is easy:&nbsp;<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Beginning Inventory + Net Purchases \u2013 COGS = Ending Inventory<\/p>\n<\/blockquote>\n\n\n\n<p><span>Your beginning inventory is the last period\u2019s ending inventory. The net purchases are the items you\u2019ve bought and added to your inventory count. The cost of goods sold includes the total cost of purchasing or manufacturing finished goods that are ready to sell.&nbsp;<\/span><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"394\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=1280px\" alt=\"\" class=\"wp-image-8895\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c4ca4238a0b923820dcc509a6f75849b-700x394.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p><span>The simplest way to calculate ending inventory is to do a physical inventory count. But most of the time it doesn\u2019t make sense to do a physical count, especially if you have a large amount of inventory to keep track of.&nbsp;<\/span><\/p>\n\n\n<p>[CP_CALCULATED_FIELDS id=7]<\/p>\n\n\n\n<p>Fortunately there are better ways to calculate ending inventory that provides more accuracy and is more efficient. For instance, using a <a href=\"https:\/\/www.shipbob.com\/3pl\/\">third-party logistics<\/a> (3PL) provider like ShipBob and integrating their fulfilment technology with inventory management solution like Cin7 makes finding the value of ending inventory a breeze.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-ending-inventory-calculator\">Ending inventory calculator<\/h2>\n\n\n\n<div class=\"iframe-embed aligncenter\">\n  <iframe loading=\"lazy\" src=\"https:\/\/shipbob.replit.app\/embed\/ending-inventory\" \n          width=\"100%\" \n          height=\"550px\" \n          frameborder=\"0\"\n          style=\"border: 1px solid #e5e7eb; border-radius: 8px; box-shadow: 0 2px 4px rgba(0,0,0,0.1);\">\n  <\/iframe>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-ending-inventory-methods-and-examples\">Ending inventory methods and examples<\/h2>\n\n\n\n<p><span>There are several different ways to calculate the value of your ending inventory. The method you choose will impact everything from budgeting to <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/reorder-quantity-formula\/\"><span>inventory reorder quantity<\/span><\/a><span>, and most importantly \u2014 growth profit. The method used to determine the value of ending inventory will impact financial results, so be sure to choose a <a href=\"https:\/\/www.shipbob.com\/blog\/retail-inventory-method\/\">method<\/a> that\u2019s right for your business and stay consistent with it.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-fifo-method-first-in-first-out\">FIFO method (first in, first out)<\/h3>\n\n\n\n<p><span>FIFO is an accounting method that assumes the inventory you purchased most recently was sold first. Using this method, the cost of your most recent inventory purchases are added to your COGS before your earlier purchases, which are added to your ending inventory.&nbsp;<\/span><\/p>\n\n\n\n<p><span>For example, <\/span>let\u2019s say you bought 5 of one SKU at $15 each and then another 5 of the same SKU at $20 each a few months later. If these 10 same products are in your available inventory and you sell 5 of them, using FIFO you would sell the first ones you bought at $15 each and record $70 as the cost of goods sold.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"394\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=1280px\" alt=\"\" class=\"wp-image-8894\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/c81e728d9d4c2f636f067f89cc14862c-700x394.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p><span>Accountants and business owners choose FIFO periods of high prices or inflation <\/span>to produce a higher value of ending inventory than the alternative method, LIFO (last in, first out method).<span>&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-lifo-method-last-in-first-out\">LIFO method (last in, first out)<\/h3>\n\n\n\n<p><span>Using the LIFO method, the most recently purchased inventory items are the ones that are sold and shipped out first. Simply put: goods that are purchases later are sold earlier.&nbsp;<\/span><\/p>\n\n\n\n<p>For example, let\u2019s use the same example as above of purchasing 5 of one SKU at $15 each and then another 5 of the same SKU at $20 each. If you sell 5 units using the LIFO technique, you would sell the 5 items you purchased most recently at $20 each and record $100 as the cost of goods sold.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"394\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=1280px\" alt=\"\" class=\"wp-image-8893\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/eccbc87e4b5ce2fe28308fd9f2a7baf3-700x394.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p><span>Accountants might suggest using LIFO during times of decreasing prices.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-weighted-average-method\">Weighted average method<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/blog\/inventory-weighted-average\/\"><span>Weighted average method<\/span><\/a><span> (WAC) is determined by<\/span><span> dividing the total amount you spent on the inventory you have on hand by the total number of items on hand. This provides an averages of the cost of purchased goods in your ending inventory.&nbsp;<\/span><\/p>\n\n\n\n<p>For example, during the fiscal year you started with a beginning inventory balance of 100 items at $2.50 each. You purchased an additional 300 items at $3.50 each later on. Your ending inventory would include 400 items valued at $3.25 each, with a total value of $1,300 (assuming no purchases were made during this time).<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"394\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=1280px\" alt=\"\" class=\"wp-image-8892\" data-responsive-img srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=700px 650w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=860px 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=1180px 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=1400px 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2023\/07\/a87ff679a2f3e71d9181a67b7542122c-700x394.png?w=1600px 1440w\" fetchpriority=\"low\" \/><\/figure>\n<\/div>\n\n\n<p id=\"use\">WAC is the simplest way to value ending inventory, and it makes the most sense to use when all products sold are identical.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to use ending inventory<\/h2>\n\n\n\n<p>Once you\u2019ve calculated your business\u2019s ending inventory, you can use that information in many ways. Here are just some of the things brands can do after they\u2019ve calculated ending inventory for a given period.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"467\" width=\"700\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=1280\" alt=\"\" class=\"wp-image-10792\" srcset=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=2250 2250w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=400 400w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=700 700w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=768 768w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=1536 1536w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=2048 2048w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=1280 1280w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/11\/0ce4b28bda221c285ce06e28d9e11843.jpeg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Match inventory recorded with actual inventory<\/h3>\n\n\n\n<p>You want to make sure that the figures on your inventory balance sheet match up with what\u2019s currently in your warehouse. Knowing your ending inventory verifies the inventory that you have recorded matches the actual <a href=\"https:\/\/www.shipbob.com\/blog\/physical-inventory\/\">physical inventory<\/a> you have on hand. If your <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-levels\/\">inventory levels<\/a> are less than they should be, this could be a sign of <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-shrinkage\/\">inventory shrinkage<\/a> due to accounting error, theft, or a variety of other issues.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"467\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=1280\" alt=\"\" class=\"wp-image-14134\" srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=2560 2560w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=400 400w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=700 700w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=768 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=1536 1536w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=2048 2048w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/04\/c5b7a6153bab0dbbde80cf3bbcb16fb4-scaled.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Calculate the net income<\/h3>\n\n\n\n<p>Likewise, you want to know<a href=\"https:\/\/www.sage.com\/en-us\/blog\/income-statement-template\/\" target=\"_blank\" rel=\"noreferrer noopener\"> the exact income statement<\/a> i.e how much <a href=\"https:\/\/dealhub.io\/glossary\/revenue\/\" target=\"_blank\" rel=\"noreferrer noopener\">revenue<\/a> you\u2019re making on what you\u2019re selling. Once you calculate ending inventory, you\u2019ll have a clear understanding of whether your actual inventory matches the recorded inventory. If the numbers don\u2019t match up, this could be a sign that you\u2019re paying too much for the initial purchase of goods based on current market value, or that it\u2019s time to rethink your <a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-pricing-strategies\/\">pricing strategy<\/a>.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"467\" width=\"700\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2024\/02\/3ae5972638105dda1d41f26f67266196-scaled.jpg?w=1280\" alt=\"\" class=\"wp-image-11944\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Ensures accuracy for future reports<\/h3>\n\n\n\n<p>Remember how ending inventory is calculated from beginning inventory? It goes the other way too. A given accounting period\u2019s beginning inventory is calculated from the previous period\u2019s ending inventory. Beginning balance is calculated from the previous reporting period\u2019s ending balance. Therefore it\u2019s crucial that the correct ending inventory is calculated correctly in your<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/glossary\/what-is-a-balance-sheet\/\"> balance sheet<\/a>.&nbsp;<\/p>\n\n\n\n<p>There are several ways to calculate ending inventory, so it\u2019s best to stick with one method every year to avoid discrepancies in future reports.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-3pls-help-improve-ending-inventory-management\">How 3PLs help improve ending inventory management<\/h2>\n\n\n\n<p><span>Partnering with a 3PL like ShipBob and integrating their technology with Cin7 can make the process of <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-flow\/\">tracking inventory<\/a> much easier and simpler. Here\u2019s how.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-embed is-provider-youtube wp-block-embed-youtube 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<h3 class=\"wp-block-heading\" id=\"h-1-accurate-inventory-tracking-with-shipbob-cin7\">1. Accurate inventory tracking with ShipBob + Cin7<\/h3>\n\n\n\n<p><span>ShipBob is a tech-enabled 3PL. ShipBob\u2019 built-in <a href=\"https:\/\/www.shipbob.com\/inventory-management\/\">inventory management<\/a> tools can be directly integrated with <\/span><a href=\"https:\/\/www.cin7.com\/\" target=\"_blank\" rel=\"noopener\"><span>Cin7<\/span><\/a><span>, the market leader in inventory management software. That way, you can track inventory from one dashboard, helping you make more accurate buying and selling decisions, provide better customer service, and save on inventory and <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/logistics-costs\/\"><span>logistics costs<\/span><\/a><span>.&nbsp;<\/span><\/p>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\"><span>Inventory tracking<\/span><\/a><span> tasks that are normally time-consuming (like calculating or valuing ending inventory) can be done in a snap \u2014 or just a few clicks. Unlike other inventory solutions, Cin7 tracks actual inventory costs, not average costs, for more accurate COGS.<\/span><\/p>\n\n\n\n<p><span>With ShipBob as your 3PL and Cin7 as your inventory management solution, you have the option to <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/3-benefits-using-more-than-one-warehouse-ecommerce-fulfillment\/\"><span>split inventory across multiple fulfilment centres<\/span><\/a><span> while tracking inventory levels all in one place.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-custom-reports-and-forecasting\">2. Custom reports and forecasting<\/h3>\n\n\n\n<p><span>With ShipBob, you can easily sync<\/span><span>&nbsp;<\/span><a href=\"https:\/\/www.shipbob.com\/blog\/order-fulfillment\/\"><span>order fulfilment<\/span><\/a><span> with an inventory management solution like Cin7 to help <\/span><a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-optimization\/\"><span>optimise your supply chain<\/span><\/a><span> and centralise <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-report\/#:~:text=ShipBob%20simplifies%20the%20process%20for,handles%20ecommerce%20fulfillment%20for%20you.&amp;text=By%20syncing%20with%20your%20ecommerce,in%20stock%2C%20minute%20by%20minute.\">inventory reporting<\/a>. With ShipBob\u2019s <a href=\"https:\/\/www.shipbob.com\/blog\/new-free-analytics-reporting-tool\/\">analytics and reporting tool<\/a>, you can easily track <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/inventory-days-on-hand\/\">inventory days on hand<\/a> and other metrics like:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Historical stock levels at any point in time in any location<\/li>\n\n\n\n<li>Days left until a SKU will be out of stock<\/li>\n\n\n\n<li>Sales frequency across channels<\/li>\n\n\n\n<li>Product demand compared to previous periods<\/li>\n\n\n\n<li>Best-selling and slowest-moving items<\/li>\n\n\n\n<li>And much more<\/li>\n<\/ul>\n\n\n\n\n\n<p><span>Cin7 also aggregates this information, and combined with data from its accounting and 550+ other app integrations, it offers an unbeatable analytics and reporting package for any product business looking to <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-optimization\/\">optimise inventory<\/a> across all locations and sales channels.&nbsp;<\/span><\/p>\n\n\n\n<p id=\"faqs\"><span>Get in touch with ShipBob today to learn how our fulfilment services and technology can help your ecommerce business, and <\/span><a href=\"https:\/\/www.cin7.com\/\" target=\"_blank\" rel=\"noopener\"><span>talk to the inventory experts<\/span><\/a><span> at Cin7 to find out how inventory management software can simplify your business, even as you open up new sales channels.<\/span><\/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\/\"><strong>Request Fulfilment Pricing<\/strong><\/a><\/div>\n\n\n\n<section class=\"wp-block-shipbob-blocks-section-container section section-container  max-width-blog\"><div class=\"container section-info section-info-align-none \"><h6 class=\"section-title\"><\/h6><h2 class=\"section-content h2\">Ending inventory FAQ<\/h2><p class=\"section-copy\">Here are some of the most common questions ecommerce businesses have when it comes to calculating ending inventory.<\/p><\/div><div class=\"container flex-container direction-col justify-none align-none flex-wrap\">\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is included in ending 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\n<p>The basic formula for calculating ending inventory is: Beginning inventory + net purchases \u2013 COGS = ending inventory. Your beginning inventory is the last period\u2019s ending inventory. The net purchases are the items you\u2019ve bought and added to your inventory count. The cost of goods sold includes the total cost of purchasing inventory.<\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is included in ending 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\n<p>Ending inventory includes the final value of the inventory you have on hand at the end of an accounting period, after the total purchase of inventory and items sold within that time period are calculated.<\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How do you find ending inventory using FIFO?<\/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\n<p>FIFO stands for \u201cFirst In, First Out.\u201d It is an accounting method that assumes the inventory you purchased most recently was sold first. Using this method, the cost of your most recent inventory purchases are added to your COGS before your earlier purchases, which are added to your ending inventory.<\/p>\n\n<\/div><\/div><\/div>\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col  col-8\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">What is the ending balance in finished goods?<\/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\n<p><span>Finished goods refers to the product you sell, not the component you purchase to make an item. The ending balance in finished goods is the total value of sellable inventory you have on hand at the end of an accounting period.&nbsp;<\/span><\/p>\n\n<\/div><\/div><\/div>\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 ending inventory on a balance sheet?<\/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\n<p>At the close of each accounting period, ending inventory is recorded as a current asset on a business\u2019s balance sheet. Because it is inventory that is viable to be sold, it belongs on the \u201casset\u201d side of the balance sheet, rather than liabilities.<\/p>\n\n<\/div><\/div><\/div>\n\n<\/div><div class=\"cta-container u-hidden\"><a class=\"btn btn-primary \" href=\"\"><\/a><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to determine ending inventory value, and how the right inventory management solution can make the process easier. <\/p>\n","protected":false},"author":176,"featured_media":535,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[8],"class_list":["post-534","blog","type-blog","status-publish","has-post-thumbnail","hentry","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>Ending Inventory Guide: Formula, Free Calculator, &amp; Solutions for Your Online Store - ShipBob UK<\/title>\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\/uk\/blog\/ending-inventory\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ending Inventory Guide: Formula, Free Calculator, &amp; 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