 Next method periodic inventory system using Excel or another spreadsheet. So if we want to step up from a cash based type system, most people that deal with e-commerce situations would recommend something like this rather than trying to do a perpetual inventory system with an application that's going to be pulling all the data into the system. And because we're using a periodic inventory system here, once again, we're kind of breaking out the transaction from the sales side of the transaction, which we might integrate. We've talked about in prior presentations to the inventory tracking side of the transactions where we have to track units of inventory as well as the cost of inventory. So we can track unit of inventory purchase and sales in an external spreadsheet using a flow assumption like first in, first out, FIFO or a weighted average, which are common types of flow assumptions. So in other words, when we purchase inventory for like a third party platform, such as a Shopify or an Amazon, oftentimes people are fairly good at tracking the inventory that they need in terms of units, possibly with the help and use of those third party platforms to make sure they have the inventory needed in order to cover any kind of sales that are going to be taking place. So you're kind of tracking inventory in units on the third party platform. And when you purchase the inventory, you can obviously see the transaction of purchasing inventory because you're going to be paying for it in some way, which means it's going to be coming out of the bank feeds. So when you purchase the inventory, that's a pretty clear type of transaction because the cash method kind of ties out to it. You could see the purchase when you purchase inventory, you increase the inventory account for the purchase generally. It's on the sales side of things that's often the problem because these third party applications are usually tracking only the units of inventory and they're not tracking the dollar amounts of the of the inventory. So that's where the problem happens. And when we sell the inventory, we're not pulling that data into our QuickBooks system in order to decrease the inventory per sale because, again, that would be quite tedious to do to pull that information in. And therefore, what we need to do is periodically, possibly every month, for example, determine how much inventory we have left and therefore how much inventory we have sold. In other words, we can do the cost of goods sold calculation beginning inventory plus purchases minus ending inventory gives us the amount of inventory we sold. And then we can basically determine, you know, what what the cost of goods sold adjusting entry should be and just enter a journal entry into our QuickBooks system for that adjustment. And so that we have the correct ending balance in terms of inventory for dollar amount, as well as the cost of goods sold, but we're not tracking units in QuickBooks. We're just adjusting the financial statements periodically. And we have to use a flow assumption, by the way, because inventory, even if we buy the same units of inventory, the price might go up in an inflationary time or it could go down, but usually it'll go up. And so the same units of inventory could have different prices. So that's going to complicate our calculation of the value of the inventory. So we'll talk more about that in an example. But the idea would be that then we can just make periodic adjusting entries to the QBO QuickBooks online to properly record ending inventory and cost of goods sold possibly on a monthly basis on a periodic basis, possibly monthly. So what are the pros and cons of using this periodic inventory system with the help of Excel or another spreadsheet? On the pros side, it's fairly easy. It's not as easy as the cash base system because we got to track this stuff in another worksheet, but it's still fairly easy. It provides detail for units of inventory and dollar amount of inventory. In other words, for internal decision making, calculating the inventory using this method is going to give us more detailed information than not having that inventory system. And remember that oftentimes small businesses, they do this kind of stuff to comply with taxes and they start to think, well, this is just red tape taxes are just doing this. But really the tax code is kind of built on general inventory principles. So these things are the reason you track inventory as an asset and then expense it using that timing concept is because it's better for internal decision making. So when you get more detailed on your internal decision making, it's useful, of course, to have the proper cost of goods sold calculation in the same time period as the related sales so that you can try to figure out your estimated sales in the future and your profit margins and all that kind of stuff. So more comprehensive financial statements for decision making periodically, possibly monthly instead of just yearly. In other words, when you use the cashed based method, you're probably just making an adjustment at the end of the year to comply with the taxes. However, you would like to be doing it periodically, at least just monthly, so that you can see your financial statements again for the internal decision making, which you can do in a periodic system. Cons, there's going to be a learning curve to track inventory in Excel and learn flow assumptions like first in first out and weighted average. In other words, clearly you're going to have to use some Excel concepts to be able to track your inventory in Excel so that you can do the calculations to do the monthly adjusting entries into the QuickBooks system. And if you're going to be tracking, you're going to have to use some kind of flow assumption because the inventory is usually going to change in value. So if you say, if you sell the same widget, it might cost $20 today and $22 tomorrow. And so that means that when you sell the inventory, you've got this valuing problem in terms of how much was the widget that you sold cost because you had all these widgets which cost different amounts because of inflation or whatever the cost went up over time. And that means you have to use some kind of flow assumption like a 540.