Mastering the Art of Inventory: The Inventory Turnover Report in QuickBooks Enterprise 2024

In the world of QuickBooks Enterprise 2024, managing inventory is as easy as pie—or at least, it is now with the R7 release's new Inventory Turnover Report. Think of it as your inventory's personal trainer, whipping those numbers into shape and helping you flex those financial muscles. Unfortunately, QuickBooks has made it a little difficult to access this information. Fear Not, we have curated the information available and put it all here for you!!

Why Use the Inventory Turnover Report?

This tool is like the Swiss Army knife of inventory management. It helps you:

• Understand Sales Performance: Finally, know which products are flying off the shelves and which ones are collecting dust faster than a forgotten New Year's resolution.
• Evaluate Sales Cycle: Find out how long it takes to sell your items—because who doesn't love a good countdown?
• Track Inventory Activity: Keep tabs on when your inventory last hit the road (or should we say, invoice?).
• Make Informed Decisions: Adjust reorder points, quantities, and pricing based on real data, not just a gut feeling or a fortune cookie prediction.
• Minimize Risks: Reduce inventory-related risks and keep your financial ship sailing smoothly—no life jackets required.

Key Metrics: Inventory Turnover Ratio & Days

The report crunches numbers like a mathlete, calculating two key metrics. There are generally two ways to calculate inventory turnover: using the Cost of Goods Sold (COGS) method and the Sales method. QuickBooks' Inventory Turnover Report uses the COGS method:

1. Inventory Turnover Ratio: This is your COGS (cost of goods sold) divided by the average inventory value. If your COGS is $5000 and your average inventory value is $2000, your turnover ratio is 2.5. That's like selling and replenishing your inventory 2.5 times a year—talk about multitasking! For a visual guide, check out QuickBooks' Inventory Calculator.

2. Inventory Turnover Days: Divide the number of days in the period by the turnover ratio, and voilà! With our example, it takes 146 days to sell your inventory. If only we could get our gym memberships to work that efficiently!

A higher turnover ratio or lower turnover days means your inventory is selling faster than hotcakes, while the opposite might need a little nudge (or a marketing campaign).

How to Use the Inventory Turnover Report in QuickBooks

Ready to unleash this tool? Here's how you can get started:

1. Go to Edit and select Preferences (because who doesn't love a good preference?).
2. Choose Items & Inventory, then Company Preferences.
3. Ensure Inventory and Purchase Orders are Active. If not, give them a gentle nudge.
4. Navigate to Reports, select Inventory, and then Inventory Turnover Report.

Here is a video that QuickBooks has made available highlighting the report and ways to utilize it.

For more detailed guidance, check out the QuickBooks Help Article.

Explore More with Advanced Inventory Resources

Looking to dive deeper into inventory management? Visit our Advanced Inventory page for more helpful resources and tips to take your inventory skills to the next level.

And there you have it! With the Inventory Turnover Report, you'll be managing your inventory like a pro—complete with a cape and superhero theme music.