How to Keep Inventory
Keeping inventory is an important part of business management. If you don't keep accurate records you will not know how much profit you are making or how much of a loss you have. You will also not be able to give truthful information when filling out your taxes. That means you could have the IRS audit your tax returns. Keeping inventory is time consuming but it must be constantly updated to remain current.
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Instructions
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Begin by taking down all of the products you have in stock at this very moment. That is called your beginning inventory. At the beginning of each year you are going to take a beginning inventory for that year so you will know what is bought and sold each year for your taxes. You can take this information down by hand or you can create a spreadsheet.
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Take stock of the products you have on hand and be sure to have a column for what you paid for the product, what you are pricing the product, and how much the product actually sold for. In most cases the product will sell for what you are asking. It still helps to have the three columns even if the last two are the same amounts. Begin each row by writing the date the product was purchased and end each row with the date the product was sold.
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Update your inventory list every time you get a new shipment. This should be done before you even place the products on the shelf. You should receive a list with each package that arrives so just make sure everything is in the box that should be there and then take that slip to input your information in to the computer.
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Update your products sold each night. If you have a small company then you can keep all your receipts and do this at the end of the week.
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Write off any products that get broken or spoil. If you just throw the product away without making a record that the product was destroyed it will continue to show that you have the product on the shelf for sale. You can write $0 sold for in the sold column and write the date it spoiled or was broken after that figure. This is also information you will need for your tax records.
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Keep up with the inventory process so that your accountant can prepare your taxes with ease.
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Tips & Warnings
Keep and file all receipts for your taxes. If you don't have a receipt you are not going to be able to claim the information on your taxes.
Keep up with the inventory process so that your accountant can prepare your taxes with ease.
