Announcement

Collapse
No announcement yet.

Inventory Tracking

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    #16
    Yep

    Garbage in> garbage out. Not to mention thieft, spoilage, unaccounted for waste and personal use/
    Last edited by BOB W; 11-16-2006, 07:07 PM.
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

    Comment


      #17
      Physical Inventory

      At least at the end of the year you need a physical inventory. Too many errors can occur with perpetual inventory records. Some people prepare invoices for items that are never shipped and forget to delete or cancel the invoice so you might even have a negative inventory on the books.
      There are dangers in a physical inventory also. You might have a sale recorded on the books which will be shipped in an hour or two, but you count it in the inventory and add it back, cancelling the effect of the recorded transaction.

      Comment


        #18
        Thanks for the tip.

        Originally posted by Unregistered
        You should always have an annual physical inventory regardless of the software you use.
        I'll pass it on to Mom and Pop. They insist on strict adherence to GAAP (generally accepted accounting principles).

        BB: What's your ending merchandise inventory?
        Pop: Say what?
        BB: How much cheese, flour, tomatoes, pepperoni, mushrooms, and pizza boxes was in this store on December 31st?
        Pop: Maybe $5,000 more'n last year -- check with Mom.
        BB: What's your ending merchandise inventory?
        Mom: What'd Pop say?
        BB: Up five thousand.
        Mom: That good or bad?
        BB: Bad.
        Mom: Nah, he's off on that. It's more like down five.
        BB: What about personal use?
        Mom: We eat at KFC.

        Comment


          #19
          Black Bart - I think we have some of the same clients. That sounds very familiar until something goes wrong, then it's the accountants fault.

          Comment


            #20
            Unfortunately I have a client similar to BB's except he knows enough to be dangerous. This guy comes in every year and wants me to calculate his 1120s return for a gas station, then he will give me the inventory. The guy knows the game and he tries to play it well but I am on to him. He tells me to just use last years numbers to start and then he will get me the correct info when I need it. So last year I said no you give me the inventory now and we will see where it takes us.

            Comment


              #21
              Taxman / Client cooperation

              That's the hardest thing to get. In many cases, the information required to do your job properly is simply not available. Sea-tax's "$100 per month personal use" client will probably be the norm -- hardly anybody is willing to keep track of this item, although it usually is not a material factor anyway.

              As to the state "nailing" them for insufficient records, I've never seen that done -- penalties are usually for understatement of tax. An "easy" auditor might just add up bank deposits and match to the sales tax reports. A "tough" auditor could demand a list of suppliers, get copies of all invoices, add client's markup, and assess for the shortfall (which can be very substantial, done that way).

              I agree with Bob that you could obtain a standard cost for repetitive items from the client, but getting them to keep job sheets of actual expenses for custom jobs is a horse of a different color. Some will, some won't. If not, then you'd probably have to go with Joe's "debit inventory with all -- adjust at year-end." If you're lucky, they'll do like Veritas' convenience store guys -- hire a professional inventory team to come in and run up the figures. If not, the odds of getting a physical count drop sharply.

              Still, client attitudes are all over the board. Some conscientious clients will do it themselves if you advise that: it's good accounting procedure, accuracy requires it, IRS requires it.

              Comment

              Working...
              X