How to track year end inventory for small business

Periodic stock taking is usually used by small businesses that have a small amount of inventory and donвЂ™t use an electronic tracking system. ThereвЂ™s no need to divide the inventory account into different categories such as raw materials, finished goods or work-in-process. Under periodic stock management, all inventory purchases are initially recorded in a purchases вЂ“ or assets вЂ“ account.ДЄfter the physical count of the inventory is carried out, the balance in the purchases account shifts into the inventory account, which is then adjusted to match the cost of the ending inventory. In between counts, the inventory account shows the cost of the inventory as it was last recorded. As physical inventory counts are time-consuming, these are usually carried out no more than once per quarter or year. The ending inventory is only updated after a physical inventory count has been conducted. Periodic stock taking lets a company know the beginning and ending inventory within an accounting period, but unlike other methods of stock management, doesnвЂ™t track inventory on an ongoing basis. Want to learn more about stock management? Check out our entry on perpetual stock management and decide which system would work best for your business. DonвЂ™t forget about the small things like car mileage and petty cash.Periodic stock management вЂ“ also known as periodic stock taking or a periodic inventory system вЂ“ is a type of inventory valuation whereby a business conducts a physical count of the inventory at specific intervals. With everything in order from the beginning it saves you from having to go back to try to figure things out. With your books in order, prepping for taxes should be a breeze. As your business grows, you may want to bring someone on and/or deploy more sophisticated bookkeeping software. If you decide to do your own bookkeeping, you should consult with an expert especially at the beginning to make sure that you are on track. You are responsible for maintaining records on withholding, employer matching, unemployment and workerвЂ™s compensation. Employers are responsible for maintaining employee forms such as the W-4 (Withholding Allowance Certification) and the I-9 (Employment Eligibility Verification).

Hiring even one employee invokes your responsibility to file and pay forms and payroll taxes and each state has its own tax obligations. ItвЂ™s prudent to record as much data as possible including invoice dates, numbers, amounts, terms, dates and amounts paid or due, balances, and client information in real time. And keep personal and business finances separate! Accounts Receivable and PayableДЄlways keep track ofВ what customers oweВ you and what debts you owe others. Dates purchased, stock numbers, purchase prices, dates sold, and sale prices are all relevant information for inventory records. Maintain records of all inventory! This will help you to forecast for the upcoming year by tracking trends, prevent stealing and misplacing merchandise and keep inventory holdings to a minimum. Writing reimbursable checks and keeping detailed petty cash records are both valid methods of documenting cash expenditures. It is important to record the cash your business spends so youвЂ™ll have an accurate number of expenses each year. How much is coming in and how much is going out and where is it is all coming from and going to.

How to track year end inventory for small business