Many business owners do not have the QuickBooks knowledge for tracking inventory and cost of goods sold. This poses several major problems which became apparent to my client in the Medical Sales Industry.
A client came to me looking to get an accurate financial picture. They didn’t understand why they had to track every item of inventory through QuickBooks and then reduce inventory through invoicing. Everything was tracked in a basic Excel spreadsheet which took hours to maintain. Running inventory through QuickBooks increases transparency and provides accurate financial statements. Balance Sheets are accurate because you are showing the actual value of inventory assets on hand and Income Statements are reflecting the true cost of goods sold and not overstated net income.
You need to hire a professional bookkeeper who excels at inventory management for several reasons. If you reduce the amount of excess inventory you have on hand you will free up cash to be used in other aspects of the business. However, running too low on inventory can affect your relationships with customers if they need to wait for orders to be filled. There is a fine line in knowing how much inventory to keep on hand and Slate Accounting Group can help you find that balance.