Wasted Stock & Time!! Please Help

[stevenje]

While I agree with your point,



At this point in the narrative, somebody should be telling that dummy to get on the road and quit bothering people before he loses his job.

And that is exactly what I did George! I need this job! Boy whose guys up front sure are a crabby bunch before they get their coffee break.

 

[George Stolz]

I can remember back when George was witty, gung hoe, quick minded, let's see now

that was about six months ago.

I'll try to improve, I promise. I've been a little crochety for a while now.

 

[wawireguy]

How big is your shop and how much do you want to stock? I worked for a guy that had a larger shop that stocked all the common materials we used. He buyed panels and wire by the pallet. While journeyman got lined out on the days jobs the apprentices would stock, clean vans and restock material. Then everyone would pull material for the days jobs. Inventory was relegated to putting items that we were running out of on a list for the shop to order.

 

[electricguy61]

Another problem with keeping "stock" are the tax implications.

"Inventory" is not the same as "cost of goods sold".

I'm sure someone on the forum can better explain the implications.

 

[satcom]

Another problem with keeping "stock" are the tax implications.

"Inventory" is not the same as "cost of goods sold".

I'm sure someone on the forum can better explain the implications.

Something to really think about before stocking up, in some states the inventory tax can be a real burden, one of the reasons a service type business needs to charge more, they have to recover the cost of supporting an inventory.

 

[kwired]

Something to really think about before stocking up, in some states the inventory tax can be a real burden, one of the reasons a service type business needs to charge more, they have to recover the cost of supporting an inventory.

What kind of inventory tax are you talking about? Only thing I can possibly think of is sales tax. Here it depends on how you are set up you either have a tax free inventory and charge sales tax when you sell it or you have a taxed inventory and charge no sales tax. There are other complications but that is pretty much the basics for contractors - people who convert goods and services to 'real' property.

Other than that inventory is not an income or expense so what is there to tax? It is simply cash converted to another type of asset an inventory asset. When it is sold for a marked up amount it then becomes profit after deducting the cost of goods. That would be taxable income. If you liquidate your inventory what ever cash value you end up with is an income or expense no different than a bank account that draws interest or loses value for whatever reason.

There is personal property taxes but this is for assets that you use to operate your business like tools, machines, office equipment, etc. Vehicles are usually excluded because they are taxed already through DMV registration process.

 

[electricguy61]

I'm not a tax expert, and I've never played one on TV, but my understanding is that if you have "stock", it isn't an "expense", hence doesn't deduct from your bottom line. (isn't a "cost of goods sold")

Sorry for all the "quotation marks" but these are all "tax terms",

 

[sameguy]

Like I said post#5

 

[satcom]

I'm not a tax expert, and I've never played one on TV, but my understanding is that if you have "stock", it isn't an "expense", hence doesn't deduct from your bottom line. (isn't a "cost of goods sold")

Sorry for all the "quotation marks" but these are all "tax terms",

It may also depend on what state you are in, we are in New Jersey, one of the most business un friendly states in the country, not every state will tax the same, but yes inventory for stock can be treated as an asset, under some conditions, your accountant can explain what those conditions are. The larger number of EC's contract for work that is exempt from both sales and use taxes, however, the smaller number of contractors that do service work and carry inventory, they may advice on inventory control to adjust some tax liability, the photo guys here in new jersey, get slammed with a number of tax options.

 

[nafis]

I noticed today as I was leaving our office, boxes and boxes of new material sitting out in the elements. That got me adding up the thousands of dollars of material we have scattered between my house , our shop, two storage buildings and 4 service trucks. I don't want my guys wasting time digging around searching for something we may or maynot have. As a result the problem just gets worse with everyday that passes. I tried hiring a laborer to organize and inventory but that didn't help much. I just started this whole "Management" thing a few months ago and am looking for ways to eliminate waste and streamline productivity. Any advise would be appreciated. Thanks

Inventory management such as a just-in-time inventory system (i.e. get it when you needed or periodically based on your business needs forecasting), can help minimize inventory costs and time. To help you establish method of control. You can hire an internship student with business or material logistic major . the cost of the internship student is way lower than the electrician and willing to do it for part time.
Hope that helps

 

[nafis]

It may also depend on what state you are in, we are in New Jersey, one of the most business un friendly states in the country, not every state will tax the same, but yes inventory for stock can be treated as an asset, under some conditions, your accountant can explain what those conditions are. The larger number of EC's contract for work that is exempt from both sales and use taxes, however, the smaller number of contractors that do service work and carry inventory, they may advice on inventory control to adjust some tax liability, the photo guys here in new jersey, get slammed with a number of tax options.

Materials usually identify as current asset

Equipment and machine are considered fixed assets.

The company asset = current Assets + Fixed Assets

 

[kwired]

Materials usually identify as current asset

Equipment and machine are considered fixed assets.

The company asset = current Assets + Fixed Assets

The amount of cash you have in bank accounts or on hand is also a current asset and is not taxed just because you have it just like inventory is not taxed just because you have it. Profits that you make with it are what is taxed.

 

[satcom]

The amount of cash you have in bank accounts or on hand is also a current asset and is not taxed just because you have it just like inventory is not taxed just because you have it. Profits that you make with it are what is taxed.

No, not taxed just because, but depending on type of inventory and how you control it, can leave you liable for tax in some states, your accountant can best advise you, if you need to be concerned with inventory tax, with federal, state, and local taxes, you really need professional advice if you have any business with large inventory.