Learning Center
We keep you up-to-date on the latest tax changes and news in the industry.
Mid-Year Inventory Assessment: Don’t Let Dead Stock Eat Your Margins
Let’s say it out loud:
Dead inventory is a silent profit killer.
You don’t always see it. You don’t always feel it. But if you’re not paying attention, it quietly piles up in the back room… or the warehouse… or the “we’ll move that eventually” shelf.
And by the time you realize how much money is tied up in unsold stock?
You’ve already lost the chance to course-correct.
That’s why mid-year is your moment. The perfect time to take a hard look at your inventory, clean house, and build a smarter sales strategy—before holiday chaos or another round of supply chain unpredictability rolls in.
Why This Matters More in 2025
Let’s be honest: 2025 hasn’t exactly been inventory-friendly.
With rising holding costs, tariff uncertainty, port delays, shifting consumer demand, and the “just in case” stockpiling left over from last year, most businesses are sitting on more inventory than they planned—and less liquidity than they need.
But here’s the good news:
Slow-moving stock doesn’t have to become dead inventory.
Not if you catch it early and act.
Mid-Year Inventory Assessment Checklist
1. Do a Physical Inventory Count
Yes. Physically.
Not what’s “supposed to be there” in the system. What’s actually on shelves.
Why it matters: If your records say you have 25 units but you actually have 2, your purchasing decisions are already off. It’s the fastest way to get a reality check—and stop planning based on fiction.
2. Run a Sales Velocity Report
Which items are flying off the shelves? Which ones haven’t moved in weeks (or months)?
A simple sales velocity report helps you measure what’s slow-moving—typically, anything that hasn’t sold in 90 to 180 days. That’s your baseline.
Translation: If you haven’t sold it in three to six months, it’s not “inventory”—it’s overhead.
3. Understand the Hidden Costs of Holding Inventory
Slow-moving inventory doesn’t just tie up your cash flow. It also:
Eats up warehouse space
Increases insurance and storage costs
Raises the risk of theft, damage, or obsolescence
Slows down your ability to stock and sell higher-margin items
The longer you hold on to something that isn’t selling, the more it costs you—even if it’s “paid for.”
4. Identify the Real Dead Stock
Time to be honest. What’s expired, outdated, out-of-season, or just never resonated with customers?
If it’s been through multiple sales cycles and still hasn’t moved, it’s time to cut your losses.
Rule of thumb: Inventory that hasn’t sold in 6+ months and isn’t seasonal should be flagged. Even if you “love it,” your customer clearly doesn’t.
5. Plan Smart Mid-Year Promotions (or Exit Strategies)
You don’t need to fire-sale everything. But now’s the time to:
Bundle slow movers with popular SKUs
Run a limited flash sale
Offer VIP-only promos or loyalty perks
Repackage or reposition stagnant items
And if it still doesn’t move?
Consider donating (hello, possible tax deduction), liquidating, or repurposing inventory before it collects more dust—and eats more margin.
6. Use What You Learn to Forecast Smarter
Every item that isn’t moving has a story to tell. Was it a trend that passed? Did demand change? Did your supplier push a product you didn’t really need?
Use this insight to improve your buying decisions and forecasting for Q3 and Q4:
Order closer to demand
Reduce overstock risk
Improve cash flow
Prioritize what sells now, not what “might” sell someday
Bonus: Monitor Your Inventory Turnover Ratio
If you’re a data person (or want to become one), start tracking how often inventory is sold and replaced during the year.
Low turnover = cash stuck in products.
High turnover = better cash flow, better margins, and less waste.
Even a basic view of what moves fastest can help you prioritize smarter reordering and promotion cycles.
Final Word: Don’t Let Inventory Dictate Your Business
You should control your inventory.
It should not control you.
Whether you’re running a store, shipping out of a garage, or juggling multiple warehouses, this is your chance to get clear on what’s working—and what’s dragging you down.
Because by the time December hits, it’s too late to fix a slow-moving problem that started in July.
Need a second set of eyes on your inventory strategy?
We help business owners like you review inventory performance, spot financial opportunities, and build proactive plans that protect profits year-round.
Let’s assess, adjust, and make your inventory work harder.
Contact our office today.
Want our best tax and accounting tips and insights delivered to your inbox?
Sign up for our newsletter.
Benefits of having a business advisor
Your CFO, Reimagined as a Financial Doctor
Diagnosing root causes, prescribing solutions, and guiding your property business toward long-term wealth.
Our CFO | Advisor
Raquel is a passionate business owner. Now, she is returning to her grassroots with a twist - guiding clients with her expertise as a CPA, she can advise your company as your trusted CFO and Advisor.
-
Raquel Deodanes, MS, CPA
Co-Founder✅ CPA with Real-World Experience – I help property managers stay profitable, tax-efficient, and cash flow positive.
✅ Tax Strategist – Former advisor at California’s revenue agency.
✅ Trusted by 4,000+ Businesses – Experience across CA, FL, TX, NV, and beyond.
✅ Real Estate Investor – I understand the financial realities of property management.
✅ Entrepreneur – I’ve built businesses and know the challenges you face.
Frequently Asked Questions
-
We diagnose financial inefficiencies, treat problems like poor cash flow or rising costs, and guide you to long-term financial health. That includes cleaning up your books, forecasting cash flow, optimizing operations, and helping you grow your portfolio with confidence — just like a doctor builds a custom care plan for a patient.
-
Bookkeepers record transactions. CPAs file your taxes. We connect the dots — helping you understand your numbers, strategically improve them, and make smarter decisions throughout the year. We work alongside your existing team to drive performance, not just compliance.
-
If you're unsure where your cash is going, struggling with rising costs, planning to scale, or just tired of reacting instead of planning — now is the right time. We help you get ahead of problems, not just clean up after them.
-
Clients typically see improved cash flow, cleaner books, higher NOI, better financial reporting, and a lot less stress at tax time. More importantly, you gain clarity, confidence, and control over your business — and a partner who helps you grow it.
Pricing
Painless, transparent pricing.
Let us take away your stress and give you back your time. Choose your perfect package today.
Base
-
Dedicated finance expert
-
Bookkeeping with accrual basis
-
Includes P&L, balance sheet, and cash flow statements
Core
-
Includes everything in Base, PLUS
-
Industry KPIs and financial ratios
-
Monthly virtual 1-hr meetings
-
Monthly rolling budget forecasts
Growth
-
Includes everything in Base, CORE
-
Budget vs. actuals variance analysis and review
-
Payroll and HR Platform