Hi Bill. Great point, I was conflating NIMS with their additional options of AFS or non-AFS methods. In reading the materials you've linked, it looks like they have those three options. 

Their P&L does have a COGS section, but it sounds like I need to see the balance sheet and talk more with the client about if they are keeping an inventory before we make a decision. 

It sounds like the simplest way to do this is to 1) not keep an inventory and 2) expense the supplies the same way I'm seeing it on their P&L for the year.

I have not found clarity on where that expense specifically goes on schedule C (Part II on supplies line or Part III as part of COGS), and indeed in other online discussions it seems like it's up to the taxpayer, so long as they stay consistent year to year. 

Does that mesh with your own understanding and experience?

Thanks for your thoughts.