Unsold stock is an asset on your books. Here's how to track it properly and what the ATO expects.
Inventory tracking serves three purposes: tax compliance (the ATO requires you to value stock on hand), cash flow awareness (knowing how much money is tied up in unsold stock), and profitability analysis (understanding which items sell fast and which sit). Most resellers focus on selling and neglect inventory management, which leads to blind spots in all three areas.
For each item in your inventory, you should record:
A spreadsheet is fine for up to about 100 active listings. Beyond that, you'll want a dedicated inventory management tool or accounting software with inventory features. The key is that whatever system you use must be able to tell you at any point: how many items you have in stock, their total value, and how long each has been listed.
Some resellers use cross-listing apps (like List Perfectly or Vendoo) which have basic inventory features. Others use dedicated inventory apps. And some use their accounting software's inventory module. The best choice depends on your volume and complexity.
At the end of each financial year (June 30), you must value your unsold inventory. The ATO accepts three methods: cost price (what you paid), market selling value (what you could sell it for), or replacement value (what it would cost to buy again). Most resellers use cost price as it's simplest and most conservative.
Your year-end stock value directly affects your taxable income. Higher stock value means lower deductions in the current year (because the COGS hasn't been realised yet). For more on how this connects to your overall accounts, see our guides on COGS tracking and reseller bookkeeping.
Franked is built specifically for Australian resellers. Join the waitlist to be first when we launch.