If you buy and sell any type of product, equipment, parts or anything tangible you have inventory. At any time you will want to know what you have on hand, cost, sales price, vendors where you obtain the product, who you sell it to, if it expires, if there are minimums, discounts and other valuable information. Other than the initial set up of the item(s), the Accounts Receivable and Accounts Payable system generally automatically post to the Inventory System. Inventory needs to be reconciled for your tax return as it directly affects your cost of goods sold.