Inventory is the accounting of items, component parts, and raw materials a company uses in production or sells. A business leader should practice inventory management to ensure that the business has enough stock on hand and to identify when there’s a shortage.
The verb “inventory” refers to the act of counting or listing items. As an accounting term, inventory refers to all stock in the various production stages and is a current asset. By keeping stock, both retailers and manufacturers can continue to sell or build items.