SGF, Supreme Grumble Framer
The best investment a business can make is in their CPA, let them decide what to do and then follow their instructions.
I guess it 'cost' the FD more to put out an 'inventory rich' fire. It's amazing to see so many 'creative ways' to find another tax.fire department charges a fire tax
My experience as employee was to hold off restocking mdse sold during holiday until after inventory to 'improve' GPM and increased earnings...
Employer was huge public traded company. The employer attempting to massage would have been me (under direct supervision of partner, CPA)must have had an employer who was
bendingbreaking the rules.
Ponder this scenario: You do $100k in sales on December. You pay many bills due in December on Jan 1st. You purchase $ 15k in inventory but post/pay in Jan 1st (all with vendors awareness). You also pay $15K of purchases in December. On your Statement of Income Those payments show up in Jan. CoG in this simplified example goes from 30% to 15%. At least, that's how every biz I ever owned did itIt has absolutely no impact on your tax return/profitability
Bob, you're sounding like a newbie.Ponder this scenario: You do $100k in sales on December. You pay many bills due in December on Jan 1st. You purchase $ 15k in inventory but post/pay in Jan 1st (all with vendors awareness). You also pay $15K of purchases in December. On your Statement of Income Those payments show up in Jan. CoG in this simplified example goes from 30% to 15%. At least, that's how every biz I ever owned did it.
I'll bet a dozen Krispy Kremes that pretty much every framer pays the invoice, creating a check number and assigning that date as the date of check. Just offering a practical answer in a real world setting. I'll bet Acct takes that month's activities (off check register) and creates a Statement of Income. Another dozen says you won't find many framers that do monthly reportingyou're sounding like a newbie.
no argument, but Joe frameshop doesn't have that situation and his acct probably simply downloads the QB Check Register"limitation" of our software
remember my statementbecause I am upholding the Law,
I know we both understand the 'correct' way as well as the 'typical' way, my friend.IRS has created more liars than fishing and golf combined
perhaps Grumblers here can attest as to how they post, pay and report transactions. I have a 'small, hobby' biz that is solely on QBs. Can't tell you which option I chose. I pay all invoices with credit card if accepted; love that 'cash back' thing. They 'charge' card upon shipment; I pay bill at end of billing cycle. Sometimes thats 40-45 days. Did that in frame up days generating couple of 100,000 miles yearlyAll your financial statements will reflect that selection
'smart' operators will always seek ways to 'take advantage' of tax laws to improve profitabilityI have had customers ask me to bill them for an order placed in December that we won't ship until January
Bob, I learned nothing (seriously) in 1st and 2nd semesters of Accounting, my worst class ever in college.....Bottom line:
'smart' operators will always seek ways to 'take advantage' of tax laws to improve profitability
not sure why that is in question? The stuff we learned in 1st semester accounting rarely completly reflects what we actually do in reality. Didn't this start over how much framers actually paid in year end inventory valuation?