Inventory Accounting
We track your materials, supplies, and inventory items with proper counts and valuations so your books reflect what you actually have on hand. This gives you accurate cost of goods sold and reliable financial statements.
What Goes Wrong Without It
You buy materials and supplies throughout the month. Some go straight to a job or a customer order. Some sit on a shelf or in a warehouse. If everything gets expensed the moment you buy it, your profit and loss statement is wrong. You look unprofitable in months when you stock up and artificially profitable in months when you sell from existing stock. Neither picture is accurate.
The other problem is not knowing what you actually have. You order more of something because nobody checked the back room. Or you promise a customer something you thought was in stock but it was used two weeks ago and nobody updated a spreadsheet. Inventory that is not tracked properly creates waste, delays, and decisions based on bad information.
Misstated Financials
Misstated Financials
When inventory is not properly accounted for, your cost of goods sold is wrong. That means your gross margin is wrong. That means every financial decision you make based on those numbers is built on a shaky foundation. You might think you are making 30% margin when the real number is 18%.
Tax Implications
Tax Implications
The IRS expects businesses that carry inventory to account for it properly. If you expense everything at purchase instead of tracking it as an asset and recognizing the cost when it is sold or used, you could be understating income. That is a problem during an audit and it is a problem you want to avoid in the first place.
How We Handle It
We set up a system that tracks what comes in, what goes out, and what stays on the shelf. Purchases are recorded as inventory assets. When items are sold, used on a job, or consumed in operations, they move to cost of goods sold. Your books reflect reality at any given point in time instead of just showing a running total of purchases.
We also help you establish a process for periodic physical counts so the numbers in your accounting system match what is actually in your possession. Shrinkage, spoilage, and miscounts happen. The goal is to catch discrepancies early and adjust before they compound into a bigger problem at year end.
Proper Valuation
Proper Valuation
We apply the right valuation method for your business, whether that is FIFO, weighted average, or another approach that fits your operations. This matters because the method you use affects your reported profit and your tax liability. We make sure it is consistent and appropriate for what you sell or build.
Count Reconciliation
Count Reconciliation
Physical inventory counts need to tie back to the books. We help you reconcile what is on the shelf with what is in QuickBooks. When there are differences, we investigate, make the adjustments, and document everything so you have a clean trail and accurate numbers going forward.
Who This Is For
This service is relevant for any business that buys materials or products and does not immediately sell or use them. That includes contractors who stock materials for upcoming jobs, retail shops carrying product on shelves, manufacturers with raw materials and finished goods, and gas stations tracking fuel inventory. If you have money tied up in physical goods, those goods need to be properly reflected in your financial statements.
Many of the small businesses we work with across the Tampa Bay area started out expensing everything at purchase because it was simpler. That works when inventory levels are small and relatively constant. It stops working once you start carrying meaningful amounts of stock or when the timing of purchases and sales creates big swings in your reported profit from month to month.
Better Purchasing Decisions
Better Purchasing Decisions
When you know what you have and how fast it moves, you stop over-ordering. You stop tying up cash in items that sit for months. You start buying based on actual usage patterns instead of guessing. That frees up cash for things that actually grow the business.
Clean Books at Year End
Clean Books at Year End
Year-end inventory adjustments are one of the most common headaches during tax season. If the books have been maintained properly throughout the year, closing out the period is straightforward. No scrambling to count everything in December and hoping it matches the numbers your accountant has been working with.
Tampa Bay's Small Business CPA Firm
First Step:
A Short Conversation
Tell us about your business and where you need support. We'll walk through your situation, answer your questions, and give you a clear quote.
