Inventory Accounting
Accurate tracking of inventory costs, quantities, and valuation for product-based businesses. Know your true cost of goods sold and actual profit margins.
The Complexity
Inventory accounting is not just counting products on a shelf. It is tracking the true cost of every item from the moment you purchase it to the moment it sells. That includes the purchase price, shipping, duties, storage fees, and any other expense it takes to get that product ready for sale.
Most product businesses underestimate this complexity. They know roughly what they paid for inventory but cannot tell you their actual cost of goods sold. They cannot explain why their bank account looks different than their profit and loss statement. The disconnect between inventory on hand and inventory in the books grows wider every month.
Cost of Goods Sold
Cost of Goods Sold
Your gross profit depends on accurate COGS. If you are not tracking landed costs properly you are guessing at your margins. That guess affects every pricing decision and every projection you make about the business.
Valuation Methods
Valuation Methods
FIFO, LIFO, weighted average. The method you use affects your reported profit and your tax liability. Picking the wrong one or applying it inconsistently creates problems that compound over time.
The Risk
When inventory records do not match reality your financial statements become fiction. You might show a profit on paper while bleeding cash. You might think a product line is performing well when it is actually losing money once you account for all the costs.
The IRS cares about inventory valuation. If your year-end inventory is overstated your cost of goods sold is understated. That means you report higher profit and pay more tax than you should. If it is understated you might trigger an audit. Either way the numbers need to be right.
Phantom Profits
Phantom Profits
A retailer looks at their P&L and sees a healthy margin. But the inventory count has not been reconciled in months. Shrinkage, damage, and miscounted items are hiding in that number. The real margin is much smaller than it appears.
Cash Flow Confusion
Cash Flow Confusion
Inventory ties up cash. If your books do not reflect what is actually on the shelves you cannot make smart purchasing decisions. You end up overstocked on slow movers and out of stock on your best sellers.
The System
We bring structure to your inventory accounting. That means proper cost tracking from purchase to sale. Regular reconciliation between your physical counts and your books. Clear reporting that shows you exactly where your money is tied up.
You stop wondering why your cash position does not match your profit. You can identify which products actually make you money. You have accurate numbers for tax season without scrambling to reconcile months of backlog at year end.
Regular Reconciliation
Regular Reconciliation
We reconcile your inventory records monthly. Discrepancies get identified and resolved before they snowball. Your books reflect what is actually on the shelf, not what you hope is there.
Clear Reporting
Clear Reporting
You get reports that show inventory value by category, turnover rates, and true product margins. The information you need to make purchasing decisions and manage cash flow is actually available when you need it.
Full-Service Bookkeeping for Greater Phoenix
The Next Step:
A Quick Conversation
Tell us about your situation. We'll listen, ask a few questions, and give you a clear price to handle the work.