Inventory Accounting where precision matters most.
Inventory and cost of goods sold handled with care, for businesses where product costs shape both profit and tax.
Inventory accounting is one of TreeStar's signature strengths. How you count, value, and record inventory determines your cost of goods sold, and that number carries through to your profit and your tax return. We help businesses choose and apply an inventory method that fits their operations, track purchases and production costs, reconcile physical counts to the books, and support the cost of goods sold reported on Form 1125-A. For cannabis and other highly regulated businesses, careful inventory costing is especially important, and we bring deep experience to that work.
How we help
Purchases, production, and sales recorded so inventory balances stay accurate.
Product costs calculated consistently and tied to the books and the return.
Physical counts compared to the books, with differences researched and recorded.
Help evaluating inventory accounting methods, including the small business rules under IRC §471(c).
Review of which costs may need to be included in inventory under IRC §263A, where it applies.
Books organized to support the cost of goods sold schedule filed with business returns.
Every engagement starts with a written scope, so you know exactly what we will handle for you before any work begins.
How it works
- 01 Understand
We learn your product flow, from purchasing through production and sale.
- 02 Set method
We review your inventory method and how costs are captured.
- 03 Reconcile
We tie counts and cost records to the books each period.
- 04 Support
We prepare inventory and cost of goods sold detail for your tax return.
What you can expect
Inventory balances that tie to counts
Cost of goods sold you can explain
Records organized for tax preparation
Common questions
Why does inventory matter so much for cannabis businesses?
IRC §280E generally limits deductions for businesses trafficking in certain controlled substances, while cost of goods sold is treated differently. That makes how costs are captured in inventory especially important, and we review it carefully with each client.
Which inventory method should I use?
It depends on your size, industry, and operations. Smaller businesses may qualify for simplified methods under IRC §471(c), and we help evaluate which approach fits your facts.
Can you help with physical counts?
Yes. We help plan counts, reconcile the results to your books, and record the adjustments.