How do I know my inventory and accounting data is accurate?

I’ll give you a short checklist of questions you can ask yourself to sus out if something is wrong with your books and inventory data but first my annoying short answer: Hire and expert to dig in.

You’re an expert at running your business, growing your market, developing your products, etc. but none of us are experts at everything. While you can spend a ton of time reading the software manuals, watching YouTube videos, or going back and forth with customer support to try and fix your data, I don’t recommend it.

This is the main reason clients come to me. Over the years small errors compound. Accounting data naturally builds on itself. For example, if early on you had duplicate transactions, negative inventory (even just a little!), or something was booked to the wrong account, well, now you have a complicated mess.

Inventory is a spiderweb of interconnected data. A small update in one place potentially affects many lateral and downstream transactions. When things stop making sense and start looking a little off, call me. I find all the errors or discrepancies and make everything match reality. Then you have a solid place to move forward from!

So how do you know it might be time to get professional help to clean up your books? Here are some things to ask yourself:

• Do I have negative assets (especially inventory assets) on the balance sheet?

• Do any items I sell have negative quantities in my system (including by location)?

• Are the margins what I expect? Often this is one of the first things that tips a client off that something is wrong in inventory.

• When I look at my overall cost of goods sold number, does it seem too high or too low? Does it fluctuate wildly?

• Am I regularly running out of stock when my system tells me I still have inventory? Or does my system tell me I’m out of stock when I’m not?

Ask yourself these questions and get back to me!