For simplicity sake, lets say I make metal widgets. I purchase raw metal from ‘ABC Corp’ and convert the metal into widgets. The raw metal purchase goes as an expense for my company ‘Widget LLC’
At the end of the year I have $10k worth of widget inventory. How do I deal with this from an accounting/tax perspective? All examples I’ve seen online are for purchased inventory but I’m a manufacturing business so idk how that works? Is it any different?
Bite the bullet and get some accounting help. The short answer is that for most manufacturing companies, when you purchase raw metal, those purchases aren’t expenses - they’re raw materials inventory. There are several different ways to handle that, but again, time to get some accounting help setting this up. You’ll need it in order to complete your taxes.