Inventory?????

Business By sweetcakes Updated 9 Feb 2011 , 9:56pm by tryingcake

sweetcakes Posted 9 Feb 2011 , 5:45am
post #1 of 10

now how do you go about doing inventory? do you have to count every board, box, ingredients, dusts that you have left over at the beginning of the year and put a value on that? My DH does our taxes with small business turbo tax and there is a line for inventory.

9 replies
leily Posted 9 Feb 2011 , 1:51pm
post #2 of 10

yes, When i worked in a commercial bakery i always helped the assistant manager to inventory every month (ugg! - the freezer was the worst part) For sprinkles, food coloring, etc... we just did an estimate of 1/4, 1/2, or 3/4 of a container. For boards and boxes we counted all of them. IF it's easy to count the total number then count exactly, if it's something hard like the sprinkles, dust, food coloring just estimate about how much of your full container you have.

indydebi Posted 9 Feb 2011 , 2:18pm
post #3 of 10

does your state have an inventory tax? mine used to and it was done away with. My accountant never asked for an inventory and I never did one.

Also is this line for inventory for items in stock for resale or is it supplies to be used in the biz? Not being a accounting person, I don't know the difference but I'm told there IS a difference.

Unless your hubby has an accounting background, it may be time for you to 'upgrade' to a 'real' accountant. thumbs_up.gif

My accountant gave me his opinion on these Turbo Tax and Quickbooks programs: They are good programs IF you know waht you're doing. If yo have no idea, then its "junk in, junk out".

I can attest to that with personal experience. My hubby thought he'd help me by keeping my books. He worked in a bank for 25 years but had zero experience as a bookkeeper and he totally f*cked up my numbers simply because he had no idea! When I asked why he posted something this way, he said, "Because that's how quickbooks did it." I pretty much yelled at him, "And you didn't even QUESTION why it was being done that way? You didn't even recognize how wrong that was???" I was TOTALLY pi$$ed! icon_mad.gif

I had to pull an all nighter to re-do MONTHS of figures into a basic excel sheet to give to my bank. He never got his hands on my numbers again.

Corrie76 Posted 9 Feb 2011 , 2:38pm
post #4 of 10
Quote:
Originally Posted by leily

yes, When i worked in a commercial bakery i always helped the assistant manager to inventory every month (ugg! - the freezer was the worst part) For sprinkles, food coloring, etc... we just did an estimate of 1/4, 1/2, or 3/4 of a container. For boards and boxes we counted all of them. IF it's easy to count the total number then count exactly, if it's something hard like the sprinkles, dust, food coloring just estimate about how much of your full container you have.



When I worked for Albertsons, we had to do it every three months and YES the freezer did suck! and we would count partially full things as 1/4, 1/2 and 3/4 also- or like with cake kits we would do 4 out of 7 or what ever the original amount was compared to what was there. It usually took us most of a full work day to get it done...I don't miss that at all!

scp1127 Posted 9 Feb 2011 , 2:49pm
post #5 of 10

Another addition to Indydebi's post about a professional doing your books... many of you are home businesses, so expect an audit. Home businesses are a red flag to the IRS. Mistakes can be costly. One of my majors in college was accounting. I keep my books, but I pay a professional to file, and I know what I'm doing! If you have a professional file, you are less liable for mistakes. The CPA (etc.) signs on the line above or below you (I forgot where), and this relieves you of the blame for any mistakes. You still have to pay what you owe, but you are less likely to be penalized or accused of fraud or evasion (unless you provided false info to the accountant).

costumeczar Posted 9 Feb 2011 , 5:05pm
post #6 of 10

It also has something to do with the accounting method that you use. I use the cash method and don't deal with inventories, it's all in and out. If you use the accrual method it's different. I use turbotax and they don't ask questions about inventory, just expenses.

TexasSugar Posted 9 Feb 2011 , 8:28pm
post #7 of 10
Quote:
Originally Posted by indydebi

When I asked why he posted something this way, he said, "Because that's how quickbooks did it." I pretty much yelled at him, "And you didn't even QUESTION why it was being done that way? You didn't even recognize how wrong that was???" I was TOTALLY pi$$ed! icon_mad.gif




Debi, you and my dad would get along really well. Im learning the book keeping end of the family business. Ive had to post, by hand on to those lovely long green sheets, two years worth of written checks and deposits and then move all of those numbers into the Company Journal that goes to the accountant. (This is what I was griping about on face book back a few months ago with my numbers wouldnt balance out.)

Only our payroll stuff is on QuickBooks at the moment. But since I did my two years and learned the hows and whys (at least we hope) he has agreed to move it all to the computer at some point this year.

Hes very much of a you need to understand were all the numbers come from, and how you get certain numbers kind of owner, rather than going well QuickBooks said we owe this much in Payroll Tax. Hes also a double checker, so he has his way of doing things, which Im having to learn, then comparing those numbers to the numbers the computer gives.

Hes been in business since 1983, so hes more old school about everything, where as I grew up in the computer generation. We are working on merging the two. Since hes run a successful business for as long as he is, I have a hard time arguing with his methods.

Now since I have amazed the man with some simple spreadsheets that add/sub/multiply numbers up for you which has simplified some things for him, so youd think hed be more open about computers and what all they can do. icon_wink.gif

indydebi Posted 9 Feb 2011 , 8:36pm
post #8 of 10

Texas, even when I was a "dumb 'ole" 20-something (long before that was even a term!), I would tell people, "it's not a number ... it represents something; it tells a story. What does that number tell you?"

I worked for a CFO who I overheard talking to the Chairman of the Board about one of his accounting folks. He said she could do the numbers but she couldn't figure out what the numbers were saying .... she was very weak on analysis.

Numbers. Tell. A story.

Here's another thread that is kinda touching on this same topic: http://cakecentral.com/modules.php?name=Forums&file=viewtopic&p=7053358#7053358

TexasSugar Posted 9 Feb 2011 , 8:42pm
post #9 of 10

You are right those numbers do stand for something, every pesky one of them. Thankfully he isn't ready to retire yet, because I'm still learning all about them.

tryingcake Posted 9 Feb 2011 , 9:56pm
post #10 of 10

You have to keep inventory in different segments.

There are inventory items purchased strictly for resale: example: plastic toys that sit on the cake, the the big anniversary Gold "50". You buy them, you do not make any changes. You sell them at a marked up price and they should have their own line item on the customer's invoice.

Inventory Items purchased for manufacturing of another item: eggs, flour and sugar combined together makes a cake. You charge for the cake, not the three eggs, sugar and flour, cake box and boards. Your customer will only see "cake" on the invoice - but your accounting system will see that you allotted 3 eggs to job #12345, 1 cup of flour to job #12345, etc

Shop Supplies (or whatever you want to call them): toothpicks, papertowels, etc. Things that are used/wasted for each job but are not sent out the door with the final product

And then there are tools (pans, ovens, tips, etc) that depreciate each year. This is also it's own inventory.

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