I got one part of the solution going with the client.  I thought I would update here in case anyone in the future can benefit from this.

They have a ton of products that need to go on invoices but they don't actually track for inventory. So....Voila! Client has agreed to go thru the list and make any of those "non-inventory items".  And she will deactivate items she's not using. So that will greatly help going forward.  And we will fix the valuations / may use starting quantity at the end of the year when physical inventory is done. So that fixes the inventory problem.

I still have the huge COGS number to deal with.  Still puzzling over best way to do it....