Online Exclusive: Accounting Basics for Small Contractors: How to Control Inventory

There are two primary inventory accounting systems: periodic and perpetual. With a perpetual system, sales are recorded as they occur and the inventory balance is updated continuously. Have you noticed fixtures or parts that you used to pick up from a supplier’s inventory are now special-order items? Vendor-managed inventory (VMI) is a process where the vendor (supplier) manages the contractor’s inventory for them.

When I was growing up, I remember my dad asking my mom to save the empty milk cartons. She’d wash them out and set them on the counter in the laundry room. I couldn’t figure out why he wanted empty milk cartons. Then, one day I went out into the garage and saw him cutting off the tops of the milk cartons and putting various plumbing fittings in each of them. I first learned about the different kinds of fittings by helping him. Once they were sorted, I would count how many of each

Register to view the full article

Registration on Contractor allows you exclusive access to high value content centered around proprietary research, expert analysis, and in-depth technical procedures.

Already a member? .

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish