I just had the same concern, which is how I found your post.
The "Month-end inventory snapshot" is confusing because it reports an "Ending quantity" value. But that number is different from the physical, on-hand quantity. "Ending quantity" (in this report only!) means available inventory. So if you have 100 qty on hand (physically), but 5 are spoken for (e.g., held for an order in progress) at the end of the month, this report will show 95 qty.
This documentation explains this in more detail:
https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types/default-report...
As a side note, I wish this report labeled "ending quantity" as "ending available inventory" or — even better — could report out on each of the different inventory quantities separately.
