There are certain crucially important decisions to make when you’re either buying or forming a business, and further decisions to make as you proceed to run and grow that business, we explain to clients at Geyer Law. As legal advisors to business owners, we find that one decision too rarely considered is creating – and updating -the right type of property inventory.
There’s no question of the value of property inventories when it comes to estate planning. “Your executor or trustee will have a much easier time distributing your estate if you have an updated comprehensive personal property inventory in place,” Greg Holton writes in “The Hidden Risks of Undocumented Personal Property”. An inventory of your personal property assets will need to be completed so that your final state and federal forms can be filed. Without those, the estate will not be released for distribution, Holton explains. In fact, in administering the estates for Geyer Law clients, we find the inventory of personal property is one of the most time-consuming aspects of the work.
When it comes to business planning, the complexity of maintaining an inventory system is multiplied. Often a depreciation schedule done for tax accounting purposes is the only document that records manufacturing equipment. Supplies and equipment for property maintenance and office use are often omitted, resulting in deplorably incomplete knowledge of (and lack of control of) the full value of assets. Fallout includes duplicate purchasing and insufficient evidence in the event of an insurance claim, Holton points out.
“Have you had the right products available when you needed them? Did you lose out on business when items were out of stock? Or, did you lose money due to excess stock?” Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale at the right time, squareup.com explains.
Too often, Holton says (and this holds true for businesses both large and small), employees designated to be “in charge of insurance” have focused on shopping for and negotiating the pricing of coverage, but have never addressed in depth the inventory updating needed to back up claims.
At Rebecca W. Geyer & Associates, as we’re help helping clients deal with the many decisions that must be made in the course of buying, starting, or selling a business, we make sure to make inventory management a priority. .
– by Ronnie of the Rebecca W. Geyer & Associates blog team
