What Is an Inventory—And Why Does It Matter for Cybersecurity?

A cybersecurity program can’t be effective unless it starts with one basic question:

What exactly are we protecting?

An inventory is simply a list of the technology assets your business uses—both hardware (like laptops, routers, or printers) and software (like operating systems, apps, and cloud services). While that may sound basic, it’s one of the most important tools in your cybersecurity toolkit.

Why Inventories Are Essential

Small businesses often overlook inventories because they seem like “IT busywork.” But in reality, they’re a necessary first step. Here’s why:

  • You can’t secure what you don’t know you have. Unused or forgotten devices and applications often go unpatched—making them easy targets for attackers. By identifying the hardware and software that you actually need and use for the business, you’re taking the first step towards securing them.
  • Inventories support better decision-making. From choosing what to upgrade to understanding your licensing needs, a solid inventory gives you visibility. It’s often true that better the inventory, the better the decision making process. Keeping an inventory also helps decision-making by providing longer term visibility into how you use IT assets. For example, if you’re using a certain brand of mobile device and keep retiring them early, it might be wise to look into why. Another example is costly software – if your inventory shows that you’re still paying for software you haven’t used in two years, that’s cost savings that could be / could have been captured.
  • They help during an incident. If a device or account is compromised, an inventory makes it faster and easier to respond.
  • They’re the foundation of compliance and cybersecurity frameworks. If your business is in a field requiring some type of compliance (healthcare, legal, financial, etc…) then it’s most likely subject to regulations like HIPAA or PCI-DSS. Maintaining an inventory is a basic requirement of these compliance frameworks. Outside of compliance, inventory tends to be a recommended first step across other cybersecurity frameworks – like the CIS 18 Critical Security Controls – which we use as a guideline for most of our clients.

How Small Businesses Can Manage Inventories

The word “inventory” might send a shudder down your spine.

When people hear the term ‘inventory’, it often brings to mind strict standards around accuracy and frequency—something that sounds more like enterprise IT than a small business task.

We’ve seen small businesses get stuck here, intimidated by the idea that they need a perfect system before they can even get started.

The truth is, while accuracy is important, your first inventory doesn’t have to be perfect. This step is meant to empower you—not become a roadblock.

The good news? You don’t need a full IT department to get it right. Here’s how small businesses can start simply and effectively:

  • Start simple. A spreadsheet is a great starting point. Record basic info like device type, owner, operating system, and purchase date for hardware—and name, version, and license status for software.
  • Build your hardware inventory first. If you’re looking for the quickest, easiest way to improve your company’s security, start with the hardware.
    • Even if you never complete a software inventory, you can achieve great results using a hardware-centered approach. Make sure you’re hardening each system using the information in our course, or for a guided and comprehensive approach, signing up for our Security Essentials bundle. As part of the Security Essentials, we constantly look at all of the software on each registered device, and keep everything fully up to date and free of vulnerabilities.
  • Do it once, then update regularly. You’ll want to dedicate some time to constructing the initial inventory, but it should be easy to keep updated after that. Inventories are most useful when they’re accurate. Set a reminder to review and update your list monthly, quarterly, whenever you start using a new device or software, and/or when you retire a device or software.
    • One big advantage that small businesses have vs. large corporations, is that the number of assets is much smaller and changes less. Large corporations have a tough time keeping track of their hardware and software assets because there’s so many employees, and change happens every day. Small businesses have it easier. So there’s no need to overthink it. Just try to keep it updated as it changes, and audit it once in a while to ensure that it’s accurate.
  • Tie it to your onboarding/offboarding process. This tip builds on the last one. It’s a good idea to add and remove assets as employees join or leave the company.
  • Don’t delete old data. It could come in handy later. Whenever you retire a device or software, simply move it to a different tab in the excel file.

Conclusion

A good inventory doesn’t just tell you what you have—it helps you spot problems before they become serious. It’s one of the easiest and most cost-effective ways for small businesses to build a strong cybersecurity foundation.

In the next two lessons, we’ll go deeper: first into hardware inventories, then into software inventories, and we’ll show you exactly how to create and maintain both.