Keeping track of last years inventory being carried forward and purchasing new inventory for 2024?

Forum|Forum|1 year ago
May 22, 2024
1 reply
0 views

Ask the Experts - Biz Tax - May 2024

KanchanM

There are different ways you can keep track of last year's inventory being carried foward and purchasing new inventory:

1. Using excel or google sheets: This is a good way for businesses to keep track of their inventory however, it can become difficult in real time and can be time consuming.

2. Use pen and paper: This can be a good method for businesses with simple inventory needs, but can be time consuming and one has to be very careful to avoid mistakes.

3.Using software: If their are variety of inventory items, softwares available for managing inventory can be used. The downside of this method it can be expensive than other methods.

Always make sure that the beginning inventory always matches with the prior year ending inventory, except when the business is new, in that case the beginning inventory will be zero.

Please message if you have any additional questions. If you like my response, please give a thumbs up 🙂

Michael5371Author

Thank you for replying.

I work with wood. During projects, scrap wood is generated and sometimes kept for quite awhile. During this time new boards are purchased, stored, used and scraps of wood stored. There is a mix of last years with this years.

How do you suggest I keep these straight?

Thanks

KanchanM

You can use inventory management app, here is the link with different apps you can choose from

https://quickbooks.intuit.com/app/apps/category/inventory/en-us/

The expense you are incurring for the app can be deductible as business expense.

If you don't want to use the app, you will have to keep the count of inventory of scrap left at the end of the year, boards not used this year and getting carried forward to next year as - end of the year inventory and that will also be your beginning of the year inventory for next year, periodic counting and keeping record should become practice for accurate inventory tracking.

Please respond with a thumbs up if you like my response.