IntuitJim
Employee
Employee

Possibly- it is an either / or, not a both requirement for small taxpayers. According to Publication 334 (2018), Tax Guide for Small Business, if you are a small business taxpayer (average annual gross receipts of $25 million or less for the 3 prior tax years), you can choose not to keep an inventory, IF your method of accounting for inventory treats inventory as non-incidental material or supplies, OR conforms to your financial accounting treatment of inventories.

For more detail, see: https://www.irs.gov/publications/p334#en_US_2018_publink1000313270

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