How do you keep track of inventory?

Keep a perpetual record that updates every time stock moves in or out, with each unit valued at landed cost. Reconcile it against Amazon's Inventory Ledger and FBA reports on a regular schedule, and cycle count any stock you physically hold. The aim is to always know quantity, location, and cost without doing one big annual count.

Can QuickBooks track Amazon FBA inventory?

QuickBooks can hold inventory quantities and values, but it doesn't natively understand FBA movements, multi-channel stock, or per-shipment landed cost. Most sellers pair it with an inventory system or integration that feeds accurate quantities and COGS into QuickBooks, so the books stay reconciled without manual entry.

What is cycle counting in inventory?

Cycle counting is checking a small subset of your SKUs on a rolling schedule instead of counting everything at once. It catches discrepancies while they're small and recent enough to trace. For FBA, your equivalent of a cycle count is regularly reconciling Amazon's inventory reports against your own records.

What is landed cost and why does it matter for inventory?

Landed cost is the full per-unit cost to get a product ready to sell: supplier price plus inbound freight, duties, and prep. It matters because valuing inventory at landed cost (not just the supplier invoice) is what makes your COGS and gross margin accurate. Underloading these costs overstates your profit.

How often should you reconcile FBA inventory?

Monthly is a sensible baseline, with shipment reconciliation done as each inbound shipment is received and checked in. Higher-volume sellers benefit from weekly reconciliation because lost and damaged units have time limits on reimbursement claims, and stale data compounds quickly across many SKUs.

Does Amazon automatically reimburse lost inventory?

Sometimes, but not reliably. Amazon auto-reimburses some lost and damaged units, yet plenty of eligible cases never get credited unless you find them and file a claim. That's why reconciliation matters: the Inventory Ledger events for lost and damaged stock are your evidence, and claims must be filed within Amazon's current eligibility window.

What's the best inventory management software for Amazon sellers?

It depends on whether you need quantity tracking alone or cost tracking too. Search for the best inventory app for a small business and most of what comes back is built for brick-and-mortar retail with barcode scanners, which is a different problem than reconciling a warehouse you can't walk into. Pure inventory tools handle restock timing and multi-channel sync well but often ignore landed cost, which leaves your accounting incomplete. Tools that combine perpetual valuation with accounting sync (BeanHawk is one option; several standalone inventory platforms pair with A2X-style connectors instead) close that gap. Under about 20 SKUs, a disciplined spreadsheet is honestly competitive.

Do I need inventory software if I only sell on Amazon?

Not immediately. A single-channel seller with few SKUs can track landed cost and reconcile the Inventory Ledger in a spreadsheet. Software starts paying for itself when SKU count grows, shipments overlap at different costs, or you add a second channel, because that's when manual records start drifting from reality faster than you can correct them.

Learn · COGS & inventory

How do you track inventory for an Amazon FBA business?

Short answer

Track FBA inventory by maintaining a perpetual record of every unit at its landed cost, reconciling Amazon's Inventory Ledger and shipment reports against your own counts on a schedule, and using cycle counts to catch discrepancies. The goal is to always know how many units you hold, where they are, and what they cost.

Key takeaways

•Amazon's Inventory Ledger report lists every quantity event, including receipts, customer orders, returns, warehouse damage, lost units, found units, and disposals.
•Units in transit, sitting at a 3PL, or held in Amazon's reserved status all belong on your balance sheet, not just the available-to-sell count.
•Mirroring Amazon's dashboard as your expected count makes lost stock undetectable, because your number moves in lockstep with Amazon's number.
•Reimbursement claims have deadlines, so a discrepancy caught this month is a claim while the same gap found much later is only a write-off.
•Unexplained gaps become phantom inventory, an asset your books say you own that nobody can sell, and the correction lands all at once later.

By Marcus Brandt · Head of Seller Accounting

Updated July 30, 2026

Tracking FBA inventory means knowing three things at all times: quantity on hand, location (FBA, in transit, prep center, or 3PL), and cost. Amazon tells you the quantities, but it doesn't know your cost and it loses or damages units more often than sellers expect. Reliable tracking is a perpetual system you control, reconciled against Amazon's reports rather than trusting them blindly. This guide walks through the mechanics: how to set up the record, which Amazon reports to check it against, what a reconciliation actually looks like with numbers, and when a spreadsheet stops being enough.

Record every unit at landed cost

The foundation of inventory tracking is recording each unit at its true cost when it enters your system. That cost is its landed cost: the supplier price plus inbound freight, duties, and prep, divided across the units in the shipment.

Say you order 1,000 units at $4.00 each, pay $600 in ocean freight, $250 in duties, and $150 for poly-bagging at a prep center. Your total outlay is $5,000, so each unit carries a landed cost of $5.00, not $4.00. That extra dollar matters. If you record inventory at the $4.00 invoice price, your balance sheet understates what the stock cost you and your gross margin looks a full dollar per unit better than it really is. Multiply that across a year of sales and you're making pricing and reorder decisions on fiction.

Costs change shipment to shipment, so you need a method to value units as they sell. The two common approaches are FIFO (first in, first out), where the oldest cost layer sells first, and weighted average, where all units share a blended cost. Pick one and apply it consistently. This is what keeps your COGS and inventory asset value accurate as prices drift.

FIFO tends to suit sellers whose costs move a lot between orders, because each sale is matched to a specific purchase layer and you can see margin compression happen in real time. Weighted average is simpler to maintain by hand and smooths out cost spikes, which some sellers prefer for stable staples. Neither is wrong. What's wrong is switching between them casually, because the switch itself distorts your COGS in the transition period and your accountant will have questions.

•Per-unit landed cost = (product cost + inbound freight + duties + prep) / units in shipment
•FIFO: oldest cost layer is expensed first as units sell
•Weighted average: all on-hand units carry one blended cost

Set up the perpetual record before your next shipment

A perpetual inventory record is just a running ledger where every movement gets an entry: units received, units sold, units returned, units lost or damaged, units transferred between locations. The alternative, periodic tracking, means you only true-up quantities when you count, which for FBA sellers effectively means never, since you can't walk into Amazon's warehouse.

The practical workflow starts at the purchase order. When you place a PO, record the expected quantity and cost. When the shipment lands at your prep center or at FBA, record what was actually received (short shipments from suppliers are common) and finalize the landed cost once the freight and duty invoices arrive. From that point, every sale decrements quantity and moves one unit's worth of cost from your inventory asset to COGS. Returns come back in, usually at a damaged or unsellable grade that needs its own tracking.

Location matters more than most new sellers expect. A unit in transit on the ocean, a unit sitting at your 3PL, a unit in Amazon's reserved status, and a unit available for sale are all 'your inventory,' and all belong on your balance sheet. If your record only mirrors Amazon's available count, you'll understate inventory by whatever is in transit and overstate how much cash you have free to redeploy. Track each stage as its own bucket and move units between buckets as they flow.

See it in BeanHawk

True COGS and live inventory value

BeanHawk keeps a perpetual, landed-cost valuation of every SKU — so your COGS is real, your margins are honest, and your balance sheet reflects what's actually on the shelf.

✓Landed cost per unit — freight, duties, prep — not just the invoice price
✓COGS recognized as units sell, not when you pay a supplier
✓Inventory value and 30-day COGS per SKU, exportable to your ledger

See inventory accounting →

Reconcile Amazon's reports to your records

Amazon gives you several Seller Central reports to reconcile against: the Inventory Ledger (quantity movements by event type), the FBA Inventory report (current on-hand), and shipment reconciliation for inbound discrepancies. Pull these regularly and compare them to what your own records say you should have.

The Inventory Ledger is the workhorse. It shows every event that changed your quantity: receipts, customer orders, returns, warehouse damage, lost units, found units, and disposals. Reconciling means starting from your expected balance, applying Amazon's events, and checking whether you land on Amazon's reported on-hand number. When you don't, the difference has a cause, and finding it is the whole job.

Discrepancies are routine, not rare. Units go missing in Amazon's warehouses, get damaged, or arrive short on inbound shipments. Inbound problems often start at the carton: FBA box labels that don't match the shipment plan, or boxes checked in against the wrong shipment ID, are a routine cause of received-short gaps that look like theft until you trace them. When your records and Amazon's ledger disagree, that gap is often money Amazon owes you. A free FBA reimbursement audit can surface lost, damaged, and short-shipped units that you're entitled to be reimbursed for but that never get auto-credited.

Timing is part of the discipline here. Amazon's policies put deadlines on how far back you can claim, and those windows have tightened over the years. A discrepancy you catch this month is a claim; the same discrepancy discovered eighteen months from now may be nothing but a write-off. This is the strongest argument for reconciling on a schedule rather than when something feels off.

Cycle count and a worked example

You can't physically count FBA stock, so reconciliation is your cycle count for Amazon-held units. For inventory you hold yourself (prep center, 3PL, or self-fulfilled), do rolling cycle counts, checking a subset of SKUs each week rather than a full count once a year. This catches errors while they're small and traceable.

Here is an illustrative reconciliation. Your records say you should have 500 units of an ASIN. Amazon's Inventory Ledger shows 472 on hand plus 11 marked lost in fulfillment-center operations and 6 damaged. That accounts for 489 units; the remaining 11-unit gap is unexplained shrinkage to investigate. The 17 lost-and-damaged units are reimbursement candidates.

Now put dollars on it. If that ASIN carries a $9.40 landed cost, the 17 lost-and-damaged units represent about $160 of inventory value, and Amazon's reimbursement (based on its own estimate of the item's value) may differ from your cost in either direction. The unexplained 11 units are roughly $103 of asset sitting on your balance sheet that may not exist. Left unresolved, that becomes phantom inventory: stock your books say you own but nobody can sell. Phantom inventory inflates your asset value, quietly pads your net worth on paper, and then produces a painful correction whenever you finally true things up.

Work the gap systematically. Check whether an inbound shipment was received short (shipment reconciliation shows this), whether returns came back as unsellable and got sidelined, and whether a removal order or disposal ran that you forgot to record. Whatever remains after those checks is a genuine loss: write it off so the books are honest, and file claims for anything within the reimbursement window.

•Records expect: 500 units
•Amazon on hand: 472 units
•Lost in FC operations: 11 units (reimbursable)
•Damaged: 6 units (reimbursable)
•Unexplained gap to investigate: 11 units

Common FBA inventory tracking mistakes

The most common mistake is treating Amazon's dashboard as the source of truth. Amazon's numbers are an input to your records, not a replacement for them. Sellers who mirror the dashboard have no way to detect when Amazon loses stock, because their 'expected' number moves in lockstep with Amazon's reported number. The whole point of an independent record is that the two can disagree.

Second: expensing inventory when you buy it instead of when it sells. Cash-basis thinking makes a big stock-up month look like a terrible loss and a sell-down month look like a windfall, and neither is true. Units you buy become an asset; they only become a cost when they sell. Getting this right transforms how useful your monthly P&L is.

Third: forgetting the cost side of returns and removals. A returned unit that's sellable should re-enter inventory at its cost. A returned unit that's trashed is a real loss that belongs in your books, not a silent disappearance. Removal orders that pull stock back to your warehouse are a location transfer, not a sale or a loss, and recording them wrong double-counts either revenue or inventory.

Fourth: reconciling only when cash feels tight. By then the trail is cold, claim windows have closed, and the gap between books and reality is too big to attribute to any one cause. A modest monthly routine beats a heroic annual cleanup every time.

What QuickBooks Online can and can't do here

Most sellers already pay for QuickBooks Online, so it's fair to ask how far it gets you. It does include inventory tracking, though only on its higher plan tiers, so check what your current subscription actually covers before planning around it. Receiving inventory in QuickBooks Online means entering a bill against a purchase order: quantity on hand goes up, the cost lands on the balance sheet, and COGS gets recorded when you invoice the sale.

That model assumes a warehouse you control. It breaks at the FBA border. QuickBooks has no idea Amazon shipped 40 units this morning, moved 12 into reserved status, or wrote off 3 as warehouse-damaged, and it has no way to hold freight and duty against a specific inbound shipment so the per-unit cost comes out right. Plain QuickBooks Online inventory management works fine from supplier to prep center, then stops.

Filling that gap is the entire reason the QuickBooks Online inventory apps in Intuit's app marketplace exist. Judge any QuickBooks Online inventory app on one question before anything else: does it carry landed cost through to COGS, or does it only sync units? Unit sync alone will keep your quantities tidy while your margins quietly drift.

Keep cost and quantity in one system

Spreadsheets work at low volume but break once you have many SKUs, multiple inbound shipments at different costs, and units spread across channels. The failure mode is a quantity that looks right but a cost that's a stale guess, which quietly corrupts your margins. To be fair to spreadsheets: if you run under a couple dozen SKUs from one supplier, a well-built sheet with a tab per shipment is genuinely fine, and cheaper than any software. Know your breaking point before you hit it.

Once you pass it, look at dedicated amazon inventory management software rather than stretching the sheet another quarter. The features that actually matter are unglamorous: landed-cost capture per shipment, automatic quantity sync from Amazon's reports, per-SKU valuation that survives cost changes, and discrepancy flagging tied to reimbursement claim windows. If you sell on eBay or Shopify too, multi channel inventory management software that treats each channel as a location saves you from the classic error of overselling the same units on two platforms. Ecommerce inventory management comes down to that one idea: a single unit count everyone agrees on, wherever those units happen to be sitting.

Price is where sellers get tripped up. Cheap inventory management software is easy to find, and the simple end of small business inventory software is genuinely enough for one supplier and steady costs, but the budget tiers almost always drop landed cost first. What you're left with is a unit counter and a restock alert, which is stock control rather than accounting.

Running inventory systems and accounting systems as separate worlds is where most of the pain comes from. When your amazon inventory software knows quantities and landed costs, your amazon fba accounting gets COGS for free, because every sale can pull its true cost automatically. BeanHawk takes this combined approach: perpetual per-SKU inventory valuation so quantity and landed cost stay tied together as stock moves and sells, plus flagging of the discrepancies that turn into reimbursement claims. A dedicated fba reimbursement service can also chase claims for you, typically for a percentage of recoveries, which is worth it for sellers who'd rather pay a cut than run the reconciliation themselves. Compare a few amazon seller tools on exactly this integration question before committing; a tool that tracks quantities but ignores cost solves half the problem. The mirror image is just as common: FBA bookkeeping software that posts settlements beautifully and never touches a unit count.

Accurate inventory tracking starts with each unit's landed cost, the all-in cost that should flow into COGS as you sell.

Frequently asked questions

How do you keep track of inventory?: Keep a perpetual record that updates every time stock moves in or out, with each unit valued at landed cost. Reconcile it against Amazon's Inventory Ledger and FBA reports on a regular schedule, and cycle count any stock you physically hold. The aim is to always know quantity, location, and cost without doing one big annual count.
Can QuickBooks track Amazon FBA inventory?: QuickBooks can hold inventory quantities and values, but it doesn't natively understand FBA movements, multi-channel stock, or per-shipment landed cost. Most sellers pair it with an inventory system or integration that feeds accurate quantities and COGS into QuickBooks, so the books stay reconciled without manual entry.
What is cycle counting in inventory?: Cycle counting is checking a small subset of your SKUs on a rolling schedule instead of counting everything at once. It catches discrepancies while they're small and recent enough to trace. For FBA, your equivalent of a cycle count is regularly reconciling Amazon's inventory reports against your own records.
What is landed cost and why does it matter for inventory?: Landed cost is the full per-unit cost to get a product ready to sell: supplier price plus inbound freight, duties, and prep. It matters because valuing inventory at landed cost (not just the supplier invoice) is what makes your COGS and gross margin accurate. Underloading these costs overstates your profit.
How often should you reconcile FBA inventory?: Monthly is a sensible baseline, with shipment reconciliation done as each inbound shipment is received and checked in. Higher-volume sellers benefit from weekly reconciliation because lost and damaged units have time limits on reimbursement claims, and stale data compounds quickly across many SKUs.
Does Amazon automatically reimburse lost inventory?: Sometimes, but not reliably. Amazon auto-reimburses some lost and damaged units, yet plenty of eligible cases never get credited unless you find them and file a claim. That's why reconciliation matters: the Inventory Ledger events for lost and damaged stock are your evidence, and claims must be filed within Amazon's current eligibility window.
What's the best inventory management software for Amazon sellers?: It depends on whether you need quantity tracking alone or cost tracking too. Search for the best inventory app for a small business and most of what comes back is built for brick-and-mortar retail with barcode scanners, which is a different problem than reconciling a warehouse you can't walk into. Pure inventory tools handle restock timing and multi-channel sync well but often ignore landed cost, which leaves your accounting incomplete. Tools that combine perpetual valuation with accounting sync (BeanHawk is one option; several standalone inventory platforms pair with A2X-style connectors instead) close that gap. Under about 20 SKUs, a disciplined spreadsheet is honestly competitive.
Do I need inventory software if I only sell on Amazon?: Not immediately. A single-channel seller with few SKUs can track landed cost and reconcile the Inventory Ledger in a spreadsheet. Software starts paying for itself when SKU count grows, shipments overlap at different costs, or you add a second channel, because that's when manual records start drifting from reality faster than you can correct them.