Quarterly Q&A – Fall 2018

Q:  Taking inventory is such a pain.  I just guess at it and try to give something to my CPA that will keep him happy enough to prepare my tax returns.  This shouldn’t cause any problems when it comes to selling…right?            

A:  NO. Inventory can be a huge problem depending on your business and industry when it comes time to sell.  There can always be much disagreement between what is obsolete, unsalable, or at least a slow mover.  Many times, a company will let its inventory build up to the point where there is quite an excess and this inventory may have to be carried by the previous owner on consignment or through seller financing at the time of a sale.  All these issues can happen whether you are a manufacturer, a distributor, or a retailer.  Beware!  Stay on top of your game and know where you stand with the quality and quantity of your inventory.