Can I turn off inventory tracking and go back to using cost of goods sold as a category?

If you find that tracking inventory is too much effort, Seller Ledger now makes it easy to return to "cash-based" inventory, where you categorize inventory purchases as "cost of goods sold" when buy them, rather than waiting until items sell.

To do this, simply go to Settings ->Business and you will see a new option for Inventory Accounting listed:

Simply click on the edit (pencil) icon and it will bring up the following screen:

Uncheck the box next to "Inventory" tracking and click the Save button.

This will make few changes to your data, so make sure that this is what you want to see happen:

  1. We will re-categorize all inventory purchases from transfers to your Inventory asset account to the "Cost of Goods Sold" expense category
  2. We will allow you to again select "Cost of Goods Sold" as choice when categorizing transactions

Be aware that this change will apply to all transactions, for all time periods. We do not currently support switching inventory methods from one year to the next.

Note: the IRS does not permit changing inventory accounting methods mid-year, and requires permission to do so from year to year. We strongly advise speaking with a tax professional before changing inventory accounting methods.

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