We have thousands of different parts that are all being inventoried pretty much entirely based off memory. This is just not viable anymore and I’m looking for a legit system to put in place. My thought is something along the lines of a barcode system to label the items and put them in a specific location.
A Google search is showing me an overwhelming amount of different sites that offer a service similar to this.
Any auto shop or small business owners here have any input? What system do you use?
I have a lot to learn! What does it mean to use cash accounting? How does one find out what revenue rules the IRS has in place regarding maintaining an accurate inventory?
I’m not in the automotive industry, but mine is similar in some ways.
If you have less than 26 million in revenue you can choose to not keep an inventory and treat it using cash accounting. When you buy oil filters, that’s an expense that you book. Lets say that happened in 2023. Then you sell filters in 2024. The expense is booked in '23 and the profit in '24. Vs accrual and managing inventory, the cost is booked when it’s sold. Most shops should have no too low inventory because you buy parts when a car comes in. You probably stock oil, filters, bulbs, and some smaller items. Not a whole lot.