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Tracking your inventory with Finaloop: Everything you need to know
Tracking your inventory with Finaloop: Everything you need to know
Emma Burrows avatar
Written by Emma Burrows
Updated over a week ago

In this article, we'll walk you through what you need to get your inventory and COGS set up in Finaloop:


To get this set, we need you to answer one question for us.

When do you want Finaloop to record your COGS?

1. When you purchase inventory (purchase-based); OR

2. When you sell inventory (sales-based).

You'll see this question the first time you enter the Inventory screen but you can always change your response on the Settings page. Not sure? This article on Sales-based vs Purchase-based COGS Method will walk you through the pros and cons of each.

If you choose sales-based, you'll have an option to sync your COGS (1) per-SKU (and real-time for Shopify) or (2) based on manual inputs. Check out Step 4 below for the deets!


To get everything set up correctly, you’ll need to add your inventory balance in the Inventory Settings page for the last day of the tax year before you joined Finaloop.

This is a one-time ask to set up your inventory. For example: If you joined Finaloop during 2023, we’ll need your inventory balance on 12/31/2022.


You’ll be able to view all of your inventory-related purchases (from your transactions and bills) on your Purchases screen.

Inventory-related purchases are transactions that you categorized as such (in the transactions or bills screens), and should include:

  • Finished products,

  • Supplies and raw materials,

  • Packaging and labeling supplies (since these items are usually purchased in bulk but used at the rate of actual sales),

  • Shipping/ freight costs to ship the stock TO your warehouse (such as global shipping),

  • Other indirect vendor costs, such as sales tax and vendor fees, and

  • Manufacturing/assembly or production costs (e.g., direct labor, contract manufacturers, manufacturing overhead) if you manufacture your own products.

if you haven't received a purchase yet, you can also track its status (and reflect it correctly in your books) by clicking on the purchase and then click 'Not received yet?'.

If it has been shipped, enter the shipment date to change its status to 'In transit.' If it hasn't been shipped yet (e.g, inventory deposit/down-payment/work-in-process), it will be shown as 'In process'.

Want to recategorize one of the purchases? Just click on the source link to go straight to the transaction or bill.

STEP 4: SYNC YOUR COGS (Sales-based only)

On the COGS screen, you can find your COGS broken down by sales channels, dead inventory, and product giveaways. These items decrease your inventory balance.

There can be two types of COGS data on the COGS screen - “Manual (per-channel)" COGS entries and “per-SKU” COGS entries (shown with "Products (per-SKU)" as the source).

On your P&L, your total COGS $ appears under the Cost of Goods Sold/Cost of Goods Sold (COGS), Product giveaways appear under Operating Expenses/Advertising & marketing, and Dead inventory appears under Cost of Goods Sold/Other Cost of Goods Sold.


These are COGS entries added by you, based on $ values, as a total per a sale channel. Per-channel manual COGS can be added directly on the COGS screen by clicking '+ Report per channel'.

Dead inventory or Product giveaways can be added in the same way, by changing the type in the 'Add new' screen.

When adding a new COGS entry, you can set the relevant period for the entry. Finaloop will spread the total amount of the entry over the selected period.

2. PER-SKU / REAL-TIME COGS 🚨*New Feature Alert* 🚨

Our per-SKU / real-time COGS reporting feature works best if you’re a Shopify or Amazon brand that has the cost per unit for each of your products. Additional marketplaces support (Etsy, eBay, and Walmart) will be added soon.

The COGS screen shows your per-SKU COGS broken down by sales channels, dead inventory, and giveaways (the source for these entries is shown on the COGS page as 'Products (per-SKU)'. To view a breakdown by product, just click on 'View' next to the COGS entry.

This feature also syncs your COGS automatically and in real-time from Shopify and Amazon, based on your units sold and restocked x cost per unit, for all your products.

Not interested? No worries, you can choose to disable this feature and instead can add your COGS based on $ values in the COGS screen by using Manual (per-channel) COGS entries. Simply switch the 'Report per-SKU' toggle off here.

If you've already added COGS using the Manual (per-channel) COGS entries method Finaloop in the past, but want to move to per-SKU COGS entries, please refer to the “HOW TO TRANSITION FROM MANUAL COGS TO REAL-TIME COGS” section in this article below.

Important note ⚠️

If you sync your per-SKU data from Shopify or Amazon, you can choose one of the following for your non-Shopify and non-Amazon sales channels -

  1. Add the quantity per-SKU (on the Products screen) for each product and we'll calculate your COGS (see below how, under the 'How to edit the quantity sold and restocked' section), OR

  2. Report COGS as a total value per channel (on the COGS screen, without breaking it down per-SKU) based on your inventory tracking spreadsheets or your IMS (see above how, under the 'PER-CHANNEL MANUAL COGS' section)

Reviewing or adjusting your real-time COGS

To adjust/review your per-SKU COGS, quantity sold or restocked, and the cost per unit, check out the individual products under the Products screen.

On the Products screen, you'll find a list of all of your products we synced from your sales channels, including the SKU number, current cost per unit, and quantity of units sold in the last 90 days.

Click on an individual product to find the COGS details, quantities per sales channel and cost per unit.

How to edit the quantity sold and restocked:

  • Integrated sales channels - you can adjust quantities synced from an integrated sales channel (like Shopify and Amazon). If you manually adjust these units, you can still view the original number from Shopify and Amazon when hovering over the “(i).” Currently, we sync this data only from Shopify and Amazon, but we'll be adding this feature for Etsy, eBay, and Walmart in the next few months.

  • Non-integrated sales channels - you can add and edit the number of units sold or restocked for each of your non-integrated sales channels.

⚠️ Important note ⚠️ Any change you make for one of the above is recorded in your books on the last day of the month for which you made the adjustment.

How to adjust the cost per unit

To calculate COGS accurately, we'll need the cost per unit for each of your products. Your cost per unit can be pulled from a connected sales channel (like Shopify and Amazon) if you added this data to your sales channel or it can be added manually by you.

  • The current cost is the cost per unit that we'll use to calculate your COGS per product. Note: If you populated a cost per unit in Shopify, it will appear as the current cost of the product in Finaloop, and can be changed only directly in Shopify.

  • Since product costs tend to fluctuate over time, you can add or adjust historical costs, and set different costs for different periods.

  • Please note that we only pull information from your connected Shopify store (but don’t push any information into Shopify). This means that all changes you make to the historical cost per unit on Finaloop will not be synced to Shopify. Note: Amazon Marketplace Seller doesn't allow adding cost per unit for products.

  • Bulk costs editing - you can edit the cost per unit in bulk using our Bulk costs editing tool, allowing for quick and easy editing of your costs per unit (you can access this toll via the Products screen). We recommend using this tool if you have numerous SKUs without associated costs. When using this tool:

    • Add a cost per unit for each product missing a cost. The cost per unit will be effectively applied from the start of your books with Finaloop.

    • Editing an existing cost per unit will replace the old cost, and the new cost will be applied as of the date of the old cost (since it's replacing it).

    • Cost per unit values synced directly from Shopify can't be edited using this tool.

For more information on how to calculate cost per unit, you can check out this article: How to calculate your cost per unit.

Dead inventory and product giveaways

  • You can add or adjust dead inventory units (broken or spoiled inventory, loss of purchases in shipment, etc.) and product giveaways units (items you gave away for marketing reasons. For example: giveaways to influencers) per product.

  • Finaloop will sync this to your books using the same cost per unit as used in the COGS calculation.

    ⚠️ Important note ⚠️ Any input you make for units given away is recorded on the last day of the month you adjust. Dead inventory is recorded on a specific date, based on your input.

⚠️ Important note ⚠️ Don’t forget to click save to reflect the changes on the product page. It can take up to 5 minutes (but probably much less) for these changes to be reflected on other screens in the app.

Merge products

You can merge any two or more products using this screen.

This feature is useful when you have the same product available for sale on both Shopify and Amazon (or two different Shopify stores). By merging the products, you can update the cost-per-unit once for a single product and have it applied to the others as well.

Primary product - when merging, you need to select a primary product. Once the merge is complete, the cost of the primary product will be used for COGS calculations, and the merged products will be displayed as a single entity. This merged product will retain the primary product's name, SKU, and photo.


If you've already input Manual (per-channel) COGS entries in Finaloop, you’ll need to ensure that you don’t double-count your COGS.

Once the per-SKU/real-time COGS feature is turned on (in the inventory settings page), you’ll have both per-SKU COGS entries and Manual (per-channel) entries. If your Manual (per-channel) COGS entries overlap with the per-SKU COGS entries, you’ll need to adjust them so there is no double counting of the Shopify COGS.

For example, if you have Manual (per-channel) COGS entries recorded as “multi-channel” which includes your Shopify COGS, Amazon COGS, and wholesale COGS, you’ll need to adjust them by removing the Shopify and Amazon portion. If you have “Shopify” or "Amazon" Manual (per-channel) COGS entries (i.e., 100% of the entry relates to Shopify or Amazon), you'll need to delete these entries completely.


This is the last step you need to make sure your inventory & COGS balances are 100% ready for tax time. The best part? It's only a once-a-year task!

For purchase-based brands, the actual value of your inventory isn't updated on month to month. Instead, the inventory balance on your balance sheet is only updated at year-end for tax purposes. After the year is complete, we'll need your inventory balance on December 31 to make the required adjustments to your books and ensure your books are tax ready.

For sales-based brands, your inventory balance should be in pretty good shape at the end of the year since we've been updating it each month. But, it's always a good idea to do review of your inventory balance at year-end and see if it matches up with your actual inventory count.

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