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To track inventory accurately in QuickBooks Online, setting up all inventory items is essential. This process involves inputting detailed information about each item that will be tracked, such as the item name, description, quantity on hand, cost, and selling price. By ensuring that every inventory item is set up properly, the user can maintain accurate records of stock levels, costs, and sales data.

Having all inventory items recorded allows QuickBooks Online to calculate and report on inventory metrics accurately, supporting better business decisions regarding purchasing and stock management. Properly tracked inventory helps minimize errors that can arise from relying on external systems or manual counting methods.

Maintaining a comprehensive inventory list allows for real-time tracking of loss or gain in stock, enabling the business to quickly respond to inventory shortages or excesses. This clarity is crucial for cash flow management and overall operational success.