Six Financial Habits Every Inventory-Based Business Needs

Six Financial Habits Every Inventory-Based Business Needs to Thrive

by Jacob Curtis, CPA | Curtis Accounting Solutions

Running an inventory-based business, whether a Shopify store or a traditional brick-and-mortar shop, often feels like navigating a mountain trail without a map. You see sales, but your profits vanish. You have inventory, but no personal paycheck.

At Curtis Accounting Solutions, we help inventory-heavy businesses eliminate cash flow chaos and finally pay themselves, using a tailored version of the Profit First system, backed by clean books and real financial insight.

Here are six essentials every inventory-based business needs to master for true financial freedom:

1. Switch to Accrual Accounting for Real Clarity

If your books are still on a cash basis, you're only seeing part of the picture. Accrual accounting matches income with the costs it takes to earn that income—especially important when inventory is involved.

Why it matters:

• You’ll understand your true cost of goods sold (COGS)
• It helps you time decisions based on profitability, not just bank balances
• It creates cleaner, more useful financial reports for planning

Clean books start with accurate timing and categorization—the foundation for every other financial strategy.

2. Keep Your Books Clean and Up to Date

Poor data = poor decisions. If your books are messy, you're reacting, not leading. Accurate, timely bookkeeping ensures:

• Confidence in cash flow and profit
• No tax-time surprises
• Strategic visibility into your business

You can’t grow what you can’t see clearly.

3. Know Your Break-Even Point

How much do you really need to sell before you're making a profit?

Use our Break-Even Calculator to pinpoint your break-even number. It shows exactly what it takes to cover your costs—and when you actually start profiting. This clarity changes how you price, promote, and plan.

4. Track Your Inventory Turnover Ratio

Your inventory isn’t just gear—it’s cash in a different form. If it’s sitting too long, it’s silently draining your financial flexibility.

The Inventory Turnover Ratio shows how quickly you’re selling through inventory and replenishing it. High turnover = healthy movement and better cash flow. Low turnover = stagnant inventory and cash tied up.

Use Ciara’s Inventory Turnover Ratio Tool to calculate yours and benchmark against your industry.

Pro tip: Track this monthly, especially before and after peak seasons.

5. Discover Your Financial Archetype (and Use It to Lead Smarter)

You lead your business with a unique money mindset, and understanding it can change everything. Our Financial Archetype Quiz reveals your default financial leadership style and how to lean into your strengths (without tripping over blind spots).

Here are the six archetypes:

• Visionary Builder – Bold ideas, big growth energy. Your challenge? Grounding every launch with a 90-day cash forecast.
• Reactive Operator – You hustle hard and stay close to your customers. The risk? Running from your bank balance instead of a plan.
• Cautious Steward – Frugal, wise, resource-protective. But sometimes so cautious you stall growth.
• Delegating CEO – You hire great help and move fast. But if reports are late or vague, you lose visibility.
• Abundant Optimist – You see opportunity everywhere. But profit disappears unless you protect it up front.
• Data-Driven Strategist – Your dashboards are top-notch—but insights need action.

Next step: Take the quiz and start building a financial plan that fits your leadership style—not just your spreadsheets.

6. Use Profit First to Structure and Simplify Your Cash Flow

The Profit First method flips traditional accounting on its head by allocating your revenue into specific accounts before spending:

• Income Account: Collects all revenue
• Inventory Account: Buys only what’s needed
• Profit Account: Builds a buffer and pays you quarterly
• Owner’s Pay: Ensures you get a regular paycheck
• Tax Account: No more surprises come April
• Operating Expenses: You run the business on what’s left

By making small, regular allocations, you take control of your cash before it controls you.

Download our Profit First Starting Guide to get started today.

Ready for Peace of Mind?

Most inventory-heavy stores fail not because they lack passion but because they run out of cash.

Want to dive deeper into your business finances? Explore our tools, guides, and free resources to build clarity, consistency, and control.

Start with the Profit First Starting Guide or take the Financial Archetype Quiz to get tailored insights for your leadership style.

Have more questions? Please email me at [email protected]