diff --git a/api/v1alpha1/conditions.go b/api/v1alpha1/conditions.go
index f30922fa..13a3644a 100644
--- a/api/v1alpha1/conditions.go
+++ b/api/v1alpha1/conditions.go
@@ -28,7 +28,14 @@ func SetGitOpsSetReadiness(set *GitOpsSet, status metav1.ConditionStatus, reason
 	apimeta.SetStatusCondition(&set.Status.Conditions, newCondition)
 }
 
+// SetReadyWithInventory updates the GitOpsSet to reflect the new readiness and
+// store the current inventory.
 func SetReadyWithInventory(set *GitOpsSet, inventory *ResourceInventory, reason, message string) {
 	set.Status.Inventory = inventory
+
+	if len(inventory.Entries) == 0 {
+		set.Status.Inventory = nil
+	}
+
 	SetGitOpsSetReadiness(set, metav1.ConditionTrue, reason, message)
 }
diff --git a/api/v1alpha1/inventory.go b/api/v1alpha1/inventory.go
index 733bbf74..9990ccf7 100644
--- a/api/v1alpha1/inventory.go
+++ b/api/v1alpha1/inventory.go
@@ -3,7 +3,7 @@ package v1alpha1
 // ResourceInventory contains a list of Kubernetes resource object references that have been applied by a Kustomization.
 type ResourceInventory struct {
 	// Entries of Kubernetes resource object references.
-	Entries []ResourceRef `json:"entries"`
+	Entries []ResourceRef `json:"entries,omitempty"`
 }
 
 // ResourceRef contains the information necessary to locate a resource within a cluster.
diff --git a/config/crd/bases/templates.weave.works_gitopssets.yaml b/config/crd/bases/templates.weave.works_gitopssets.yaml
index 0309ed1b..ebd926a2 100644
--- a/config/crd/bases/templates.weave.works_gitopssets.yaml
+++ b/config/crd/bases/templates.weave.works_gitopssets.yaml
@@ -196,8 +196,6 @@ spec:
                       - v
                       type: object
                     type: array
-                required:
-                - entries
                 type: object
               observedGeneration:
                 description: ObservedGeneration is the last observed generation of
diff --git a/controllers/gitopsset_controller.go b/controllers/gitopsset_controller.go
index 67041b9f..7cf86140 100644
--- a/controllers/gitopsset_controller.go
+++ b/controllers/gitopsset_controller.go
@@ -56,8 +56,9 @@ type GitOpsSetReconciler struct {
 //
 // For more details, check Reconcile and its Result here:
 // - https://pkg.go.dev/sigs.k8s.io/controller-runtime@v0.13.1/pkg/reconcile
-func (r *GitOpsSetReconciler) Reconcile(ctx context.Context, req ctrl.Request) (ctrl.Result, error) {
+func (r *GitOpsSetReconciler) Reconcile(ctx context.Context, req ctrl.Request) (result ctrl.Result, retErr error) {
 	logger := log.FromContext(ctx)
+
 	var gitOpsSet templatesv1.GitOpsSet
 	if err := r.Client.Get(ctx, req.NamespacedName, &gitOpsSet); err != nil {
 		return ctrl.Result{}, client.IgnoreNotFound(err)
@@ -82,8 +83,10 @@ func (r *GitOpsSetReconciler) Reconcile(ctx context.Context, req ctrl.Request) (
 	if inventory != nil {
 		templatesv1.SetReadyWithInventory(&gitOpsSet, inventory, templatesv1.ReconciliationSucceededReason,
 			fmt.Sprintf("%d resources created", len(inventory.Entries)))
+
 		if err := r.patchStatus(ctx, req, gitOpsSet.Status); err != nil {
 			logger.Error(err, "failed to reconcile")
+			return ctrl.Result{}, fmt.Errorf("failed to update status and inventory: %w", err)
 		}
 	}
 
diff --git a/controllers/gitopsset_controller_test.go b/controllers/gitopsset_controller_test.go
index 8bba146f..ae980f2a 100644
--- a/controllers/gitopsset_controller_test.go
+++ b/controllers/gitopsset_controller_test.go
@@ -267,6 +267,56 @@ func TestReconciliation(t *testing.T) {
 			t.Fatalf("failed to update Kustomization:\n%s", diff)
 		}
 	})
+
+	t.Run("reconciling with no generated resources", func(t *testing.T) {
+		ctx := context.TODO()
+		devKS := makeTestKustomization(nsn("default", "engineering-dev-demo"), func(k *kustomizev1.Kustomization) {
+			k.ObjectMeta.Annotations = map[string]string{
+				"testing": "existingResource",
+			}
+		})
+		test.AssertNoError(t, k8sClient.Create(ctx, test.ToUnstructured(t, devKS)))
+		defer deleteAllKustomizations(t, k8sClient)
+
+		gs := makeTestGitOpsSet(t, func(gs *templatesv1.GitOpsSet) {
+			// No templates to generate resources from
+			gs.Spec.Templates = []templatesv1.GitOpsSetTemplate{}
+			gs.Spec.Generators = []templatesv1.GitOpsSetGenerator{
+				{
+					List: &templatesv1.ListGenerator{
+						Elements: []apiextensionsv1.JSON{
+							{Raw: []byte(`{"cluster": "engineering-dev"}`)},
+						},
+					},
+				},
+			}
+		})
+		test.AssertNoError(t, k8sClient.Create(ctx, gs))
+		defer cleanupResource(t, k8sClient, gs)
+
+		ref, err := resourceRefFromObject(devKS)
+		test.AssertNoError(t, err)
+
+		gs.Status.Inventory = &templatesv1.ResourceInventory{
+			Entries: []templatesv1.ResourceRef{ref},
+		}
+		if err := k8sClient.Status().Update(ctx, gs); err != nil {
+			t.Fatal(err)
+		}
+
+		_, err = reconciler.Reconcile(ctx, ctrl.Request{NamespacedName: client.ObjectKeyFromObject(gs)})
+		if err != nil {
+			t.Fatal(err)
+		}
+
+		updated := &templatesv1.GitOpsSet{}
+		if err := k8sClient.Get(ctx, client.ObjectKeyFromObject(gs), updated); err != nil {
+			t.Fatal(err)
+		}
+
+		assertInventoryHasNoItems(t, updated)
+	})
+
 }
 
 func deleteAllKustomizations(t *testing.T, cl client.Client) {
@@ -344,6 +394,17 @@ func assertInventoryHasItems(t *testing.T, gs *templatesv1.GitOpsSet, objs ...ru
 	}
 }
 
+func assertInventoryHasNoItems(t *testing.T, gs *templatesv1.GitOpsSet) {
+	t.Helper()
+	if gs.Status.Inventory == nil {
+		return
+	}
+
+	if l := len(gs.Status.Inventory.Entries); l != 0 {
+		t.Errorf("expected inventory to have 0 items, got %v", l)
+	}
+}
+
 func cleanupResource(t *testing.T, cl client.Client, obj client.Object) {
 	if err := cl.Delete(context.TODO(), obj); err != nil {
 		t.Fatal(err)