at last, a business question has stumped me (giggle). how do you all handle inventory for tax purposes? do i measure the quantity left in each can of paint, or assume it its open it is "empty" for inventory purposes? i'm getting lost in the "is this a supply or material" questions... help!
------------------ :: Scooter Marriner :: :: Coyote Signs :: :: San Francisco :: :: don't blame me... i'm just a beginner ::
Posted by Roy Frisby (Member # 736) on :
A sign shop is basically a service type business and doesn't maintain an inventory! Buy it as you need it and use it before the end of the fiscal year.
------------------ Frisby Signs, Inc. El Dorado, Arkansas 870-862-5073
Posted by Monte Jumper (Member # 1106) on :
I never had to inventory our shop but a friend of mine has it down to a science.
He weighs everything...all you need know is the weight of one item...the rest is elimentary. I must say I can't understand doing it any other way.
Even paint... (weight can vary per color)but overall you'd be much closer weighing everything than popping the lid skinning it and measuring it.
aw ...it makes sense to me anyway...what's everone else think?
------------------ Monte Jumper SIGNLanguage/Norman.Okla.
Posted by Kent Smith (Member # 251) on :
We do a complete inventory because we maintain a stock of many materials and hardware. With paint we have either new full cans, 1/2 full or empty. It averages and with spoilage it works pretty well. A material is any item that becomes an integral part of the finished product, that is it can be recovered like a sheet of aluminum. A supply is any product which is consumed in the process like tape, rags, solvent and in many cases paint since it alone cannot be recovered. There is some gray area but set up a list and be consistant and if you can justify your reasoning to the tax assesor, that stands.
------------------ Kent Smith Smith Sign Studio Greeley, Colorado, USA kent@smithsignstudio.com
Posted by old paint (Member # 549) on :
scoot..your a 1 man shop...and small small shop..dont even claim an inventory....i dont...if anyone asks you tell em you buy materials as the job requires...and stuff you got layin round is leftover...heheheheh
------------------ joe pribish-A SIGN MINT 2811 longleaf Dr. pensacola, fl 32526 850-944-5060 BEWARE THE TRUTH.....YOU MAY NOT LIKE WHAT YOU FIND
Posted by ScooterX (Member # 2023) on :
ok, good. i feel a little better now. i started looking at all the stuff piling up (i bought that 4x8 for a job that needed a 3x6, so is the 2x4 and the 1x6 "inventory" or "scrap"?) and the rolls of tape and pots of paint... and and and.
is there any value (internally) in accounting for the inventory annually? or is it "just" a taxtime nuissance?
------------------ :: Scooter Marriner :: :: Coyote Signs :: :: San Francisco :: :: don't blame me... i'm just a beginner ::
Posted by Bill Preston (Member # 1314) on :
Hi, Scooter, Inventory as such, I don't worry about. I just keep track of what I spend on materials, and keep the receipts, a percentage of utilities for the house as expenditures for the shop, a log book for the truck use for the shop versus personal use, add up the gross receipts for the year and subtract out what I have spent. As long as you keep your receipts, you can back up your claims for deductions. So far, it has worked for me.
------------------ Bill Preston Fly Creek, N.Y. USA wpreston2@stny.rr.com
