ProvenCFO’s Post

Here’s another reminder before the year ends: Inventory count is more than a routine! 🧮 Why is the year-end inventory count vital for small businesses? ✅ Ensure your financial statements truly reflect inventory value. ✅ Determine accurate costs of goods sold (COGS) for tax reporting purposes. ✅ Gain insights for product performance and informed decision-making. ✅ Mitigate stockout or overstock risks, enhancing customer satisfaction, ✅ Boost investor confidence with transparent year-end financials. How are you handling your year-end count? If a manual process is still in play, it’s time to rethink! Click the play button on this video. Weigh the challenges and consider this: automating inventory count means a smoother year-end, critical for financial reporting, tax compliance, and strategic planning. Ready to optimize your inventory management? DM us for a chat 📲 #onecfo #onecfoph #bookkeeping #smallbusiness #smallbusinessowner #finance #financetips #yearendfinances #yearendprep #inventory #manualinventory #automation

Principles in Financial Reporting 1.MEASUREMENT PRINCIPLES GAAP generally uses one of two measurement principles. HISTORICAL COST PRINCIPLE: For example, if land that was purchased for $30,000 increases in value to $40,000, it continues to be reported at $30,000. FAIR VALUE PRINCIPLE: For example, certain investment securities are reported at fair value because market price information is often readily available for these types of assets. 2. REVENUE RECOGNITION PRINCIPLE: The revenue recognition principle requires that companies recognize revenue in the accounting period in which the performance obligation is satisfied. Revenue is recognized at the time the service is performed. In a merchandising company, the performance obligation is generally satisfied when the goods transfer from the seller to the buyer. At this point, the sales transaction is complete and the sales price established. 3. EXPENSE RECOGNITION PRINCIPLE: The expense recognition principle dictates that efforts (expenses) be matched with results (revenues). Thus, expenses follow revenues. 4. FULL DISCLOSURE PRINCIPLE: The full disclosure principle requires that companies disclose all circumstances and events that would make a difference to financial statement users. If an important item cannot reasonably be reported directly in one of the four types of financial statements, then it should be discussed in notes that accompany the statements.

In your three-to-five-year plan, watch for these system warning signs. Reflecting on a recent discussion with a company, consider these points:   👉 Delayed Inventory Updates: When using an integrated accounting and inventory system, delays in updating the inventory system can pose significant challenges. Valuation differences may lead to financial discrepancies. Teams often resort to manual data entry, compounding the issue.   👉 Labor-Intensive Reconciliation Between Disconnected Systems: Disconnected systems struggling to meet demand require substantial labor, investigation, and reconciliation efforts. Unfortunately, this process diverts valuable resources from other tasks and strategic decision-making.   👉 Depreciation Challenges: Manually calculating depreciation on spreadsheets introduces errors, affecting depreciation expense calculations. This impacts not only financial statements but also tax reporting and strategic decision-making. In your plan, prioritize a single system that can effectively manage all departments. Look for a solution that not only accommodates your current needs but also allows room for growth without outgrowing its capabilities. #businessstrategy #systemsintegration #efficiencyimprovement, #financialmanagement #futureready

As an advocate for best practices in rebate management, I'm here to shed light on a topic that often flies under the radar, but is vital for businesses that rely on supplier rebates. Inventory rebate accounting isn't just about numbers; it's about securing your financial foundation and making informed decisions. 🔍 Audit Readiness: Accurate inventory reporting ensures you're always audit-ready. No more last-minute scrambles or sleepless nights when the auditors come knocking. Your financials are in order, and compliance is a breeze. 📊 Consistent Monthly Reporting: Say goodbye to sudden adjustments and financial rollercoasters at key reporting dates. Accurate regular calculations ensure your monthly numbers are steady and reliable. No surprises, no unhappy stakeholders, just consistency. 🚀 Enhanced Efficiency: Precision in inventory reporting streamlines your operations. You save time and effort on this sometimes tiresome task. 📈 Smart Rebate Allocation: Accurate reporting enables intelligent rebate allocation to sales. You can reward high-performing teams/branches, therefore effectively driving growth where it matters most. These benefits aren't just numbers on a balance sheet; they're the pillars behind a successful finance operation. Accuracy isn't a luxury; it's a necessity for success in rebate management. At Enable we've recently released functionality for managing the rebate received from suppliers, but where the product is not yet sold through. I rarely promote our product because we have an amazing marketing team who do that, but from personal experience of the challenges, this is an incredibly valuable add-on. #RebateManagement #InventoryReporting #BusinessSuccess #Efficiency #AuditReadiness

Inventory valuation is crucial for accurate financial reporting. Follow these general guidelines: 1. Consistency: Use the same valuation method consistently to ensure comparability. 2. Cost Basis: Base valuation on the cost of acquiring or producing the inventory. 3. Methods: i - FIFO (First In, First Out): Assumes items purchased or produced first are sold first. ii- LIFO (Last In, First Out): Assumes the latest items are sold first. iii - Weighted Average: Average cost across all units. 4. Lower of Cost or Market (LCM): Compare the cost and market value, using the lower of the two. 5. Specific Identification: Assign specific costs to specific units, often used for unique or high-value items. 6. Conservative Approach: Be cautious and conservative in estimating market value to avoid overvaluation. 7. Net Realizable Value (NRV): If the market value is less than cost, use NRV (selling price minus selling costs). 8. Periodic Review: Regularly reassess inventory values, especially if market conditions change. 9. Documentation: Keep detailed records of costs, calculations, and any adjustments made. 10. Compliance: Adhere to relevant accounting standards (e.g., IFRS or GAAP) and tax regulations. Always consult with accounting professionals to ensure compliance with specific regulations and the unique needs of your business.

📢 The Impact of Inaccurate Inventory Counts on Financial Reporting and Business Decisions! 📊🔍 🔹 Did you know that inaccurate inventory counts can have a significant impact on your financial reporting and business decisions? Let's dive into how this issue can affect your bottom line: 👉 Financial Reporting Woes: 💰 Inaccurate inventory counts can lead to incorrect financial reporting. When your inventory numbers are off, it affects your balance sheet, income statement, and cash flow statement. This can result in distorted financial ratios, misleading investors, and potential compliance issues. 📉 👉 Misguided Business Decisions: 🤔 When you rely on inaccurate inventory counts, your business decisions may be based on faulty information. This can lead to poor planning, overstocking or understocking, and missed opportunities. Without accurate inventory data, you may struggle to make informed decisions about pricing, promotions, and supply chain optimization. 📦 👉 Increased Carrying Costs: 💸 Inaccurate inventory counts can result in higher carrying costs. Overestimating stock levels ties up capital in excess inventory, leading to increased warehousing and holding costs. On the other hand, underestimating stock levels can result in stockouts, leading to lost sales and dissatisfied customers. 📦 👉 Operational Inefficiencies: ⚙️ When your inventory counts are inaccurate, it affects your entire supply chain. Inefficient purchasing, production, and distribution can occur, leading to delays, increased costs, and decreased customer satisfaction. Accurate inventory counts are crucial for streamlining operations and optimizing your supply chain. 📈 ✨ Don't let inaccurate inventory counts hinder your financial reporting or business decisions! ✨ Invest in inventory management systems like #Cin7core to ensure accurate inventory counts, reliable financial reporting, and informed decision-making. 📊💡 #inventoryoptimization #financialreporting #businessdecisions #supplychainmanagement #efficiencyiskey #accurateinventorycounts

One of the biggest mistakes we see with businesses managing inventory do is: 🔍 Lack of Proper COGS and Inventory Costing: Many businesses struggle with accurately calculating the Cost of Goods Sold (COGS), which can lead to distorted profit margins and unreliable financial reports. 💡 Implementing Proper Accounting Practices: we recommend ✅ Setting Up Trial Balance and P&L Categories: Establish distinct categories for COGS, Overhead, Marketing, Other expenses in the profit and loss (P&L) statement, This creates a clearer financial picture. Then make sure COGS are booked consistently each month. By implementing these practices, You can achieve precise financial insights, Leading to better decision-making and improved profitability. 🏆 #Accounting #COGS #FinancialManagement #BusinessGrowth #Profitability

You know what really sucks? Scrambling for receipts, invoices, and purchase orders trying to figure out if the money that went out to make a product was more or less than the money that came in after you sold it. You need to know your costs if you run a business. And if you’re not tracking your costs through out the year, you’re probably kicking yourself in the shin trying to calculate profits come reporting and tax season. I present to you, your shiny new shin guard: Distru’s new cost accounting tools! You can now create preset cost types that can be added to production & harvest assemblies or directly to any inventory, to represent real operational costs like: • Compliance and R&D Testing • Labor • Storage Costs • Waste • And whatever else you want to track! Automating granular cost tracking helps your accounting team stay sane, save time, and show accurate margins in real time, while also giving you tools move towards profitability faster. Reach out to us to learn more about our new Cost Accounting features! #cannabisindustry #cannabisbusiness #cannabismarketing

As a professional accountant, I believe in the power of accurate financial reporting. One crucial aspect of financial statements is presenting inventory at the end of the period. Here's a quick overview of the process: Choose the Right Method: Decide between FIFO, LIFO, or weighted average to value your inventory. This choice impacts your balance sheet and income statement. Physical Count: Ensure you physically count your inventory to verify its accuracy. Calculate the Cost: Calculate the cost of goods sold (COGS) using the chosen method and adjust the inventory value accordingly. Disclosure: Be transparent in your financial statements. Clearly state the inventory valuation method you've used. Consistency: Maintain consistency in your approach from one period to the next for meaningful comparisons. #Accounting #FinancialReporting #InventoryManagement 📊💼 Let's keep our financials clear and transparent for better decision-making!

We're still doing this profitability bracket! > Cash flow trumps a simplified chart of accounts > Good bookkeeping before you can calculate break-even > Forecasting more helpful than knowing inventory turns > Contribution margin super important but a clean balance sheet more so > A good pricing strategy is imperative > ROI can (and should) be viewed everywhere in business > Metric tracking keeps you tuned into needle moving areas https://lnkd.in/gGtU7z8P