The end is near. The end of both our Back to Basics for your business series…and summer. We know many of you have already sent your littles back to their job of learning. Meghan and I are still clinging to the last days of summer family fun; while also secretly counting down the hours until our littles get back to school. Before we say officially say good-bye to summer, let’s squeeze in a little inventory fun.
This week in my household, we are packing bags for one last cabin weekend with friends and packing backpacks with school supplies. My kids are learning a bit about taking an inventory of their school supplies as we pack items to be taken to their schools on backpack night. Reading their lists and checking items off as they are tossed into the bag. Labeling items as necessary. And in my daughter’s case, even sorting items by which locker they will reside in; regular locker vs gym locker. This isn’t the first time we’ve taken stock of their supplies this summer though. And much like school supplies, its best to get a jump on tracking your business inventory sooner, rather than later.
Back to Basics Tip #5: Get an inventory system set up right out of the gate. Inventory tracking shouldn’t be something you think about for first time when your tax accountant asks for the value of your business’s inventory at year end. (Heads up – it is a number you will be asked to provide!) Waiting that long is likely to cause you a considerable amount of stress. Instead, take some time early on in your business to set up an inventory tracking system. Keep it super simple. A sure-fire way to be sure you won’t keep up with your inventory tracking is to make the system complicated and time consuming.
Would you like a couple of tips to get you started? Of course you do! First, try to keep your inventory low. For some of you, this might not be an option. (We know the inventory struggles of our LuLaRoe gals!) If it is an option, do it. Inventory can get complicated quickly. You’ll have less tracking to do if you have less inventory coming in and going out. Second, keep your purchased inventory and your freebie inventory separate. Your freebie inventory is made up of all those incentives and products that you earned for free simply by doing your job. Free is fun! You should take tracking those items seriously though. Purchased inventory items and freebie inventory items are often valued differently and treated differently when it comes to income and expenses for your business. Keeping them separate is your first step in properly accounting for them.
If you don’t know where to start with your own inventory tracking system? We are here to help! Whether you are looking to put a system in place as you are getting your business started or looking for help untangling an inventory knot before you get a system up and running; we can help get you on the right path. Together we might figure out that knot isn’t quite so tangled up after all.
As we wrap up our Back to Basics posts, we’re thinking of you all with kiddos headed back to school and those of you who teach kiddos. We here at BF Bookkeeping are wishing you all a fun and safe school year!