Excess Materials: Inventory or Direct Costs?

If your business tracks inventory and operates a business using material and labor to complete its projects, (a remodeling company or other construction related business, would be a good example), then you have probably had to deal with this accounting issue.

The project is completed and you have several material items that have not been used on the job. They can not be returned to the supplier, so you place them in the warehouse with other inventory items. When the invoice was paid, the costs were booked to your direct costs or cost of goods sold for that project. Is that where the costs should remain, or should the value of these items be removed from your direct costs and added to your inventory account?

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Tags: Accounting, Asset Account, Business Owners, Excess Inventory, Excess Materials, Future Project, Gross Profit Margin, Inventory Account, Inventory Count, Invoice, Job, Likelihood, Logic, Remodeling Company, Twelve Months

Preparing for a Sales and Use Tax Audit: Part 4

In Part One of this series, we discussed the initial contact with the auditor. In Part Two we covered two of the main areas that the auditor will be expecting to find errors in tax filings. Part Three listed the documentation that you should expect to provide with your tax returns for the audit period. In this segment, we will discuss some of the other issues which may cause an auditor to add an invoice to his report.

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Tags: Audit Period, Carpet Installer, Installed Carpet, Invoice, Item Descriptions, Missing Receipts, Preparing Tax, Sales And Use Tax, Sales Tax, Segment, Tax Audit, Tax Filings, Tax Returns, Vendor Invoices

3 of the Biggest Causes of Financial Problems in Business – Part 1

Running a business can sometimes feel like running through a minefield. You try to get to the other side and do your best but you live with the fear that every step will bring a new disaster. Survival comes from knowledge and the best way to navigate the difficult world of business is to know exactly where the financial pitfalls will be.

Businesses that face financial problems typically face them from 3 specific areas. In this blog post we’ll outline what they are and in the next blog post we’ll give you some ideas to manage them.

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Tags: Cash Flow, Challenge 1, Challenge 2, Challenge 3, Control Expenses, Disaster Survival, Financial Challenge, Financial Control, Financial Pitfalls, Invoice, Marketing, Minefield, Receivables, Repayment Terms

But HOW do You Make Sure Timing is Correct?

Last week we talked about timing and making sure that certain costs were entered when they are relevant. This is a very difficult territory for some and confusing for others.

I am going to try to make it simple (and I hope I’m able to do so!)
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Tags: Abc Inc, Accrual Accounting, Books, Business Income, Business Operations, Cash Basis Accounting, Graphic Designer, Invoice, Irs, January February March, Memory, Money, Pay Taxes, Small Businesses