Filling in the Gaps on Inventory Controls

Client Situation

When a landscape materials company engaged HLB Gross Collins to provide tax and business advisory services, one of the firm’s first steps was to review the company’s latest tax return. It was discovered that the previous CPA firm had not utilized Section 179, which allows taxpayers to accelerate the depreciation of newly acquired fixed assets purchased throughout the tax year.

What HLB Gross Collins Did

By amending the return, HLB Gross Collins secured a $20,000 tax refund for the company. Now considering the firm as an official member of its team, the company engaged HLB Gross Collins to perform an analysis of existing internal controls over inventory. The cause for large inventory adjustments being recorded monthly had not been determined.

After performing on-site field work to document the company’s existing internal control environment, HLB Gross Collins created detailed recommendations to fill in all the gaps in inventory controls. Once the recommendations had been completed, the team met with the company’s management, sales staff, yard staff, shipping staff, and accounting department to discuss the implementation of the new recommendations. The team wanted to ensure that the new procedures would not hinder business or customer satisfaction.

Results

The company is currently implementing the new inventory internal control procedures. Management feels confident that monthly inventory adjustments will become a thing of the past as the company continues to grow and become even more profitable.

For more information about how HLB Gross Collins can help your business, call us at 770-433-1711.