What should be specified in the import template for inventory items you want to track?

To effectively track inventory items in Xero, it is essential to specify both the inventory asset account and the cost of goods sold (COGS) account in the import template. This is crucial because the inventory asset account represents the value of the inventory held by the business, while the COGS account is used to record the costs associated with inventory that has been sold.

By including these accounts, you ensure that transactions affecting inventory are accurately reflected in the financial statements. This allows for proper tracking of inventory valuation and the expenses associated with goods sold, which are vital for calculating profitability. Without these specifications, Xero would not be able to correctly categorize and track inventory movements throughout the accounting system, leading to potential discrepancies in financial reporting.

In contrast, simply including the item name, current stock levels, or sales history does not provide the necessary financial context that is required for accurate inventory management within the system.