Ambrook’s inventory system will fit with your tax prep regardless of whether you are a cash basis or accrual basis filer.
For cash basis businesses, inventory purchases fully appear on the profit & loss statement on the date the transaction occurs, ensuring you minimize taxable income.
For accrual basis businesses, Ambrook properly books inventory purchases onto the balance sheet and defers the taxable expense until the inventory is actually used or sold.
Something differentiated about Ambrook’s inventory product is that you are able to select a unique costing method for each item variant, either first-in first-out or weighted average. This gives you flexibility with respect to how your taxable expense is calculated. For businesses that experience volatile purchase prices for inventory throughout the year, such as stocker cattle operations, this can help keep expenses more predictable and avoid unexpected spikes or drops in cost of goods sold.
If you have any questions about how best to account for your inventory at the end of the year, we recommend:
Making sure your books are up to date and mostly tagged
Inviting your accountant to Ambrook, or printing them a copy of your monthly balance sheet for the year on both a cash and accrual basis.