So, you have that new inventory client, and you’re excited to see that they get the file setup correctly. But where do you begin? And what should you consider now to get the information you want about the inventory later?
Clients usually want to start by setting up the items, but you, as their advisor, need to think about which accounts in the Chart of Accounts the items will be ‘pointing’ to. This will help you later with the financial statements, as well as other financial and operational reporting.
Inventory Items ....
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* You can have a light-manufacturing company that doesn’t have a WIP account at all because the time frame is so short. On this point, some of my fellow accountants might disagree, but if our client finishes her product in 1-2 days, why run them through a WIP account at all (except at year-end tax time)? WIP accounts are primarily for companies where processing takes a lengthy period of time.