Record Keeping Basics
Tools for record keeping
Audit proof your business - Internal records
Summary of required documents
Inventory is what you buy to resell to customers. Inventory is one of the biggest consumer of your cash and should be watched closely. I define inventory as the cash that might never be.
Inventory is also one of the places, where theft occurs in the business. Employees could take items home and before you know it, you can barely remain profitable.
It is advisable you have some type of inventory record. Using a paper log is fine to begin with.
Your inventory records must have:
- Purchase date
- Item purchased
- Date sold
- Sale price
- Beginning inventory by month
- Ending inventory by month
Manual method is not recommended if you have a large amount of inventory: Invest in a point of sale system.