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
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.