Inventory

Model product inventory, cost of goods sold, and stock levels.

Inventory blocks help you model physical products—tracking purchases, stock levels, and cost of goods sold (COGS).

Video Tutorial

Inventory Tutorial

When to Use Inventory Blocks

Use inventory blocks if you:

  • Sell physical products
  • Purchase goods for resale
  • Manufacture products with raw materials
  • Need to track stock levels
Service businesses
If you only sell services or software, you likely don’t need inventory blocks. Use Operating Expenses instead.

Creating an Inventory Item

  1. Navigate to Building Blocks → Inventory in the sidebar
  2. Click + Add (or the empty state button)
  3. Fill in the form:
Name: Widget Inventory
Cost Per Unit: $25
Purchase Deposit: 0%
Inventory Start Date: January 2024
Starting Inventory: 500 units
Minimum Units On-Hand: 100 units
Purchase Lead Time: 2 Months
Received Delay Time: Within Month
Frequency Of Purchase: 1 Month
Purchase Size: 300 units
  1. Click “Save”
  2. Select the item in the left panel to view details
  3. View the inventory forecast table below

Split Panel Layout

The Inventory page uses a two-panel layout:

  • Left panel: List of all inventory items
  • Right panel: Selected item’s details and settings

Inventory Events

Inventory events let you record changes outside of normal purchase cycles:

Event Type Description
Adjustment Correct inventory counts after physical audits
Manual Purchase Record an ad-hoc purchase outside regular schedule
Manual Sale Record a direct sale not linked to a revenue stream
Spoilage Write off damaged or expired inventory

To add an event:

  1. Select an inventory item
  2. Click Add Event in the events section
  3. Select the event type and enter details
  4. Click Save

Inventory Concepts

Cost of Goods Sold (COGS)

The direct cost of products you sell:

Revenue: $50,000 (1,000 units × $50)
COGS: $25,000 (1,000 units × $25 cost)
Gross Profit: $25,000
Gross Margin: 50%

Impact on Financial Statements

Balance Sheet

  • Inventory is a current asset
  • Increases when you purchase
  • Decreases when you sell

Income Statement

  • COGS reduces gross profit
  • Only recognized when products are sold

Cash Flow

  • Purchasing inventory uses cash
  • Cash impact happens at purchase, not sale
Cash flow timing
You pay for inventory before selling it. High inventory ties up cash. Plan purchases carefully.

Inventory Planning

Safety Stock

Keep extra inventory to prevent stockouts:

Average daily sales: 20 units
Lead time: 14 days
Safety stock: 50 units (buffer)
Reorder point: (20 × 14) + 50 = 330 units

Seasonal Planning

For seasonal businesses:

  • Build inventory before peak season
  • Plan cash needs for inventory purchases
  • Model stockout risk in scenarios

Common Challenges

Overstock

  • Ties up cash
  • Risk of obsolescence
  • Storage costs

Stockouts

  • Lost sales
  • Customer dissatisfaction
  • Rush shipping costs
Balance is key
Model different inventory levels in scenarios to find the right balance between cash efficiency and availability.