100 Second Avenue South, Suite 600, St. Petersburg, Florida 33701 | (727) 821-6161 | www.gsscpa.com

L ast March we heard a lot about the healthcare act of 2010. What we didn’t hear so much about were the “revenue raisers” that followed in its wake.

One thing to watch out for is the Economic Substance Doctrine. Section 7701(o) of the Internal Revenue Code, which states that when any transaction occurs “to which the economic substance doctrine is relevant” (ignoring federal income tax effects), it will be considered to have economic substance only if:

◆ The transaction changes in a meaningful way the taxpayer’s economic position, and

◆ The taxpayer has a substantial purpose for entering into this transaction.

In other words, you need a good business reason for having made that transaction, other than saving yourself some income tax. This IRS test is one you’ll want to pass. Failure means the transaction will likely not be allowed as a deduction, and you may be subject to a potential 20 to 40 percent penalty. IRS Notice 2010-62 contains more details.

Does your company have independent audits or financial statements prepared? Read on.

The IRS has been demanding to see accountants’ work papers under the Work Product Doctrine. These work papers are used to document income tax accruals for the financial statements – primarily for book-to-tax differences. They also can include issues to support contingent tax liabilities if certain tax return positions are disallowed.

Historically protected as privileged information, it’s no longer clear whether these f iles can be kept private. The Supreme Court declined to review the

Textron case, which has been the most prominent case on this controversy.General business credits extended

Most general business incentives were extended for 2012, but the temporary HIRE Act expired in December. The highly touted Small Business Health Care Tax Credit is available from 2010 through 2013, but only a few small businesses will meet the criteria to benefit from it.Qualified small business stock

If you were fortunate enough to acquire qualified small business stock (between Sept. 27 and Dec. 31, 2010) that gained in value, and if you hold it at least five years, in 2015 you’ll be able to take advantage of the 100 percent exemption for capital gains (including for AMT) under the Small Business Jobs Act of 2010.

More good news: The 2010 tax relief act extends that exemption for acquisitions through 2011.Startup expense deduction

If you started a business in 2010, you’ll be glad of the change in the rules related to capitalizing startup expenses. Through 2009, there was an allowance of $5,000 for this deduction with a phase-out when total expenses exceeded $50,000. For 2010 only, this threshold was doubled to $10,000. Of course, the excess amounts are amortizable over 15 years.

I n s i d e

I n s i d e

Spring 2011➜Is it time to revamp your

marketing campaign?

➜Managing inventory: The importance of your reorder points, supply chain and EDI

See Tax law changes inside

easy way to release these orders to an order management system is a big step forward.

A traditional EDI system will com-municate product codes, quantities and other specifics of the order to major suppliers. The supplier, in turn, will supply an order confirmation with ship-ment date, method of shipment and other information that can be used to update your accounting system.

As an alternative to EDI, Netfira (www.netfira.com) has taken a different approach. Netfira is a Web-based solu-tion that is not accounting-product specific. It integrates directly into the seller’s and buyer’s databases to supply data in real time, providing the most up-to-date information possible. This is unique, in that most EDI transactions do so via batch requests. Netfira’s ability to provide real availability data in real time is appealing.

Simple bar code systems to support inventory management reorder points and EDI automation systems can be purchased and implemented internally from companies like Wasp Barcode Technologies (www.waspbarcode.com). Its products can be used independently or i nteg rated w it h ent r y-level accounting systems like QuickBooks, Peachtree or Simply Accounting up through mid-market solutions like MAS 90 or Dynamics GP.

Suppliers such as Wasp also have point-of-sale systems, plus barcode readers and printers, needed to create a complete system. Automating warehouse, retail operation and/or cash register operations can close the loop for your inventory system, making reorder points more meaningful.

Time is moneyAutomating reorder points and

orders through supply chain tools such as barcodes, EDI or new options like Netfira are conveniences that save management time on routine decisions. This saved time allows companies to redirect management efforts to other issues.

It is relatively inexpensive to buy barcode equipment,

accounting software and supply chain solutions, but

what makes them work are good proce-

dures and proper decision-making.

Automate as many routine decisions as you

can through reorder points, and focus on the exceptions of inventory manage-ment to maximize your profits. – Randolph P. Johnston

Managing inventory continued from inside

Important but possibly overlooked tax law changes

A financial and management bulletin to manufacturers from:

The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS. © 2011 CPAmerica International

Inventory Counts

It’s 2011, and most companies are trying to figure out how to gain market share and increase sales.

Manufacturing firms and distributors are no exception. Connecting with customers in today’s information-rich envi-ronment requires more than a glossy brochure.

With the advent of social media, smart phones and websites that build virtual communities online, many companies are looking beyond print and into the world of cross-media marketing to bolster their success.

Cross-media marketing is a strategy to market your products and services using several different types of media to get the message out. This widens your exposure to potential customers. Instead of stopping at static mailing campaigns, for example, many successful companies integrate print and direct mail with the latest online technologies to get ahead of the competition. Cross-media marketing opportunities

Direct marketing today requires a different approach. It’s not about just printing and mailing anymore. Here are a few cross-media techniques to consider:

Personalized mail – We are bombarded with thousands of marketing messages each day. And nowhere is the competition for consumer attention as tight as in the mailbox.

Households in the United States receive over 150 billion pieces of mail each year. With all this clutter, it’s no wonder that most people tend to open their mail over the wastebasket.

You can cut through the clutter with personalization – a technique that capitalizes on the information you already have about your customers to create mailings that rise above the din.

Start by customizing each of your pieces with your customer’s name. Then, use individualized images and relevant content to reinforce your message and inspire your customer to learn more. Advanced personalization ties special offers to customer demographics, account history or purchase preferences to maximize the benefit of your marketing campaign.

Personalization helps your direct mail perform well beyond generic “ junk” mail to command dramatically improved customer response.

Personalized URLs – According to the Direct Marketing Association, more than 42 percent of consumers prefer to respond to advertisements online.

Now you can integrate your direct mail pieces with personalized Web pages to establish a powerful one-to-one connection, generate more qualified leads

and bridge the gap between printed and online marketing. Advocates of personalized URLs claim an increase in campaign response by up to 300 percent!

For example, when John visits his personalized Web page, he’s visiting a website built specifically for his viewing and to support the direct mail piece he holds in his hand. The appearance and content of the landing page should match the direct mail piece, providing a consistent customer experience.

Personalized Web pages can dramatically increase the success of your marketing campaign because online customers are directed to relevant and tailored information, and it’s easy to click-to-buy – a distinct advantage over print-only campaigns.

QR codes – Quick Response, or “QR” codes, are two-dimensional barcodes that are readable by mobile phones with a camera. Most people carry “smart phones” these days, and the power of QR codes is considered a revolutionary breakthrough in cross-media marketing.

While still emerging in the United States, QR codes are popular in Japan and Europe and provide a potentially big advantage in reaching new customers, especially as the general marketplace becomes more mobile.

These customized codes are placed on brochures, direct mail pieces, business cards and even posters or billboards. Interested customers simply point their phone, and customized infor-mation is immediately opened in the phone’s browser.

You can include targeted discount coupons, personalized Web pages, product and service information, and much more. QR codes link printed pages to an online world in an instant and may be just the advantage you need reach new customers in a new way.Moving forward

In today’s economically challenging environment, all com-panies must do more with less. These cross-media marketing techniques help make the most of your marketing dollars.

Try revamping your campaign, and set your company apart from your competition with cross-media marketing. – Kevin Craine

Having the right product in the right place at the right time is the mantra of inventory management.

With too much inventory, you can suffer from obsolescence, spoilage and excessive carrying costs. With too little inventory, you can suffer from lost sales, loss of reputation and poor customer service.

The principle is simple. In practice, execution of this principle is hard.

Several factors can help you keep the right inventory in the right place at the right time. You can mitigate mistakes by using rapid freight, but this will nearly always drive up costs. You can overstock inventory, but this can increase carrying costs and tie up valuable capital. You may get lucky from price increases in your stocked product, but you are more likely to suffer value loss while holding the inventory.

Computer systems have helped many businesses maintain inventory levels by automatically decreasing inventory when a sale or shipment takes place and increasing inventory when ordered materials are received. Inventory needs to be accurately maintained by making adjustments for theft, damage, improper picking from the warehouse and other issues. Automating reorder points

Accurate inventory is a must before trying to automate an inventory ordering process.

Procedures must cover everything that can happen to inventory, and it is impor-tant that you have cyclical or periodic inventory counts to verify the accuracy of your inventory quantities.

Once you have accurate information about the quantity on hand, you have to make an intelligent guess about future demand. You can do this by observing past run rates. You can look forward making guesses about future demand from new trends, promotions and seasonality.

You should additionally consider a safety stock number – a quantity on hand that you never want to drop below. Reorder points can then be set to take existing inventory minus future orders, minus safety stock, with an allowance for time of production and transit.

For example, let’s say you have 100 items in stock. On average, you sell 10 of these items daily, meaning you have a 10-day supply. It takes four days for an

order to arrive, and you like to have a three-day supply on hand at all times. Your safety stock number would be 30 (three days sales at 10 items per day).

With this type of run rate, you are dealing with an item that has a reasonable turn rate, so being out of stock would almost certainly cost you sales. You may get a break on freight for ordering 50 items at a time, and you would want to take this into consideration as well when you set your reorder point and quantity.

For this product, a reorder point of 80 would serve the bill fairly well. You would place an order once or twice a week and vacillate between 80 down to around 40 while waiting for an order to arrive. When your 50 items arrive, your stock level would return to around 90, and you’d place another order a day or two later. Dealing with items that have a fairly consistent turn rate at reasonable volumes from a consistent supplier is the easy part of dealing with reorder points.

Automation can help with routine management of inventory for items that move on a somewhat regular basis. This is where reorder points, in conjunction with automated ordering via electronic data interchange (EDI) using an auto-mated supply chain, can free up time to focus on the exceptions.

Trickier management occurs when you have items with slower turnover, specialty items or items that have a long receipt lead time. In these cases, you will not want to use automated ordering and may find setting a reorder point distracting because the item will show up in reorder lists routinely requiring management time.

If your goal is to always have at least one of every item in stock, note that you will need to set a reorder point of 1 to alert you that you are down to the last item of a particular product. At that point, you need to make a decision either to discontinue the item – setting the reorder point to zero – or to order this product again based on business strategy, desire to continue to sell the item or previous sales demand.

As a business owner, you want to:➤ Make sure your procedures are as

simple and complete as possible, ensuring that all transactions are properly pro-cessed to maintain inventory accuracy in real time

➤Have internal control procedures to

verify the accuracy of your information and provide checks and balances against theft, loss or damage

➤ Make sure that your system or your system count and your physical counts have minimal variances

➤ Estimate future customer demand and allow for production and shipping time, so products can arrive in time to fulfill orders

Taking advantage of EDIBusiness owners are aware that, if

purchased items arrive too soon, they sit in inventory longer, may devalue over time and often have to be relocated multiple times. The longer raw materials are held, the more they depreciate (rarely appreciate) in value. Holding inventory – raw or finished – costs money!

Supply chain management is intended to help manage those costs. Automating this process with bar codes, RFID, point of sale and inventory management systems makes this easier. Reorder points can create orders that can be approved manually or automatically and submitted to suppliers through an EDI system with minimal intervention.

Most accounting systems have inven-tory management modules available. Fewer have EDI systems, and fewer still have full-scale supply chain management systems. For smaller businesses, seeing a daily or weekly report of items that need to be ordered is sufficient. Having an

See Managing inventory on back

Managing Inventory The importance of your reorder points,

supply chain and EDI

Change in inventory methodsThere were no substantial changes in the tax impact of

altering the method of inventory accounting, but some economic pressures may make the timing more advantageous than in recent years.

The last-in, first-out (LIFO) method has been a boon to income tax savings in inflationary times, allowing companies to deduct the cost of sales at the highest amount possible and maintain their inventory at a much lower valuation using the low cost of purchases from years past.

Inf lation’s relatively f lat rate for the past few years has diminished the difference in that deferral.

Simultaneously, with the move toward conforming US GAAP to the International Financial Reporting Standards (IFRS), LIFO will not be an acceptable method for financial

reporting. IRC Section 472c requires that, if LIFO is used for tax reporting, then book accounting must use that method also. Thus, companies moving toward the IFRS will have to abandon the LIFO method for tax reporting as well.

With the convergence of those two realities, the next couple of years will be a good time to consider making the change toward the first-in, first-out (FIFO) or some other more appropriate inventory method.

You’ll need IRS Form 3115 to report the inventory accounting change with the tax year to which it applies. In most cases, the income tax impact can be spread over four years, beginning in the tax year of the change. Consult your tax adviser if you are considering this change to discuss the tax impact, accounting impact and timing to see if it is appropriate for your situation. – Adam Robinson, CPA

Tax law changes continued from front

Is it time to revamp your marketing campaign?

Spring 2011 Inventory Counts2 Spring 2011 Inventory Counts 3

It’s 2011, and most companies are trying to figure out how to gain market share and increase sales.

Manufacturing firms and distributors are no exception. Connecting with customers in today’s information-rich envi-ronment requires more than a glossy brochure.

With the advent of social media, smart phones and websites that build virtual communities online, many companies are looking beyond print and into the world of cross-media marketing to bolster their success.

Cross-media marketing is a strategy to market your products and services using several different types of media to get the message out. This widens your exposure to potential customers. Instead of stopping at static mailing campaigns, for example, many successful companies integrate print and direct mail with the latest online technologies to get ahead of the competition. Cross-media marketing opportunities

Direct marketing today requires a different approach. It’s not about just printing and mailing anymore. Here are a few cross-media techniques to consider:

Personalized mail – We are bombarded with thousands of marketing messages each day. And nowhere is the competition for consumer attention as tight as in the mailbox.

Households in the United States receive over 150 billion pieces of mail each year. With all this clutter, it’s no wonder that most people tend to open their mail over the wastebasket.

You can cut through the clutter with personalization – a technique that capitalizes on the information you already have about your customers to create mailings that rise above the din.

Start by customizing each of your pieces with your customer’s name. Then, use individualized images and relevant content to reinforce your message and inspire your customer to learn more. Advanced personalization ties special offers to customer demographics, account history or purchase preferences to maximize the benefit of your marketing campaign.

Personalization helps your direct mail perform well beyond generic “ junk” mail to command dramatically improved customer response.

Personalized URLs – According to the Direct Marketing Association, more than 42 percent of consumers prefer to respond to advertisements online.

Now you can integrate your direct mail pieces with personalized Web pages to establish a powerful one-to-one connection, generate more qualified leads

and bridge the gap between printed and online marketing. Advocates of personalized URLs claim an increase in campaign response by up to 300 percent!

For example, when John visits his personalized Web page, he’s visiting a website built specifically for his viewing and to support the direct mail piece he holds in his hand. The appearance and content of the landing page should match the direct mail piece, providing a consistent customer experience.

Personalized Web pages can dramatically increase the success of your marketing campaign because online customers are directed to relevant and tailored information, and it’s easy to click-to-buy – a distinct advantage over print-only campaigns.

QR codes – Quick Response, or “QR” codes, are two-dimensional barcodes that are readable by mobile phones with a camera. Most people carry “smart phones” these days, and the power of QR codes is considered a revolutionary breakthrough in cross-media marketing.

While still emerging in the United States, QR codes are popular in Japan and Europe and provide a potentially big advantage in reaching new customers, especially as the general marketplace becomes more mobile.

These customized codes are placed on brochures, direct mail pieces, business cards and even posters or billboards. Interested customers simply point their phone, and customized infor-mation is immediately opened in the phone’s browser.

You can include targeted discount coupons, personalized Web pages, product and service information, and much more. QR codes link printed pages to an online world in an instant and may be just the advantage you need reach new customers in a new way.Moving forward

In today’s economically challenging environment, all com-panies must do more with less. These cross-media marketing techniques help make the most of your marketing dollars.

Try revamping your campaign, and set your company apart from your competition with cross-media marketing. – Kevin Craine

Having the right product in the right place at the right time is the mantra of inventory management.

With too much inventory, you can suffer from obsolescence, spoilage and excessive carrying costs. With too little inventory, you can suffer from lost sales, loss of reputation and poor customer service.

The principle is simple. In practice, execution of this principle is hard.

Several factors can help you keep the right inventory in the right place at the right time. You can mitigate mistakes by using rapid freight, but this will nearly always drive up costs. You can overstock inventory, but this can increase carrying costs and tie up valuable capital. You may get lucky from price increases in your stocked product, but you are more likely to suffer value loss while holding the inventory.

Computer systems have helped many businesses maintain inventory levels by automatically decreasing inventory when a sale or shipment takes place and increasing inventory when ordered materials are received. Inventory needs to be accurately maintained by making adjustments for theft, damage, improper picking from the warehouse and other issues. Automating reorder points

Accurate inventory is a must before trying to automate an inventory ordering process.

Procedures must cover everything that can happen to inventory, and it is impor-tant that you have cyclical or periodic inventory counts to verify the accuracy of your inventory quantities.

Once you have accurate information about the quantity on hand, you have to make an intelligent guess about future demand. You can do this by observing past run rates. You can look forward making guesses about future demand from new trends, promotions and seasonality.

You should additionally consider a safety stock number – a quantity on hand that you never want to drop below. Reorder points can then be set to take existing inventory minus future orders, minus safety stock, with an allowance for time of production and transit.

For example, let’s say you have 100 items in stock. On average, you sell 10 of these items daily, meaning you have a 10-day supply. It takes four days for an

order to arrive, and you like to have a three-day supply on hand at all times. Your safety stock number would be 30 (three days sales at 10 items per day).

With this type of run rate, you are dealing with an item that has a reasonable turn rate, so being out of stock would almost certainly cost you sales. You may get a break on freight for ordering 50 items at a time, and you would want to take this into consideration as well when you set your reorder point and quantity.

For this product, a reorder point of 80 would serve the bill fairly well. You would place an order once or twice a week and vacillate between 80 down to around 40 while waiting for an order to arrive. When your 50 items arrive, your stock level would return to around 90, and you’d place another order a day or two later. Dealing with items that have a fairly consistent turn rate at reasonable volumes from a consistent supplier is the easy part of dealing with reorder points.

Automation can help with routine management of inventory for items that move on a somewhat regular basis. This is where reorder points, in conjunction with automated ordering via electronic data interchange (EDI) using an auto-mated supply chain, can free up time to focus on the exceptions.

Trickier management occurs when you have items with slower turnover, specialty items or items that have a long receipt lead time. In these cases, you will not want to use automated ordering and may find setting a reorder point distracting because the item will show up in reorder lists routinely requiring management time.

If your goal is to always have at least one of every item in stock, note that you will need to set a reorder point of 1 to alert you that you are down to the last item of a particular product. At that point, you need to make a decision either to discontinue the item – setting the reorder point to zero – or to order this product again based on business strategy, desire to continue to sell the item or previous sales demand.

As a business owner, you want to:➤ Make sure your procedures are as

simple and complete as possible, ensuring that all transactions are properly pro-cessed to maintain inventory accuracy in real time

➤Have internal control procedures to

verify the accuracy of your information and provide checks and balances against theft, loss or damage

➤ Make sure that your system or your system count and your physical counts have minimal variances

➤ Estimate future customer demand and allow for production and shipping time, so products can arrive in time to fulfill orders

Taking advantage of EDIBusiness owners are aware that, if

purchased items arrive too soon, they sit in inventory longer, may devalue over time and often have to be relocated multiple times. The longer raw materials are held, the more they depreciate (rarely appreciate) in value. Holding inventory – raw or finished – costs money!

Supply chain management is intended to help manage those costs. Automating this process with bar codes, RFID, point of sale and inventory management systems makes this easier. Reorder points can create orders that can be approved manually or automatically and submitted to suppliers through an EDI system with minimal intervention.

Most accounting systems have inven-tory management modules available. Fewer have EDI systems, and fewer still have full-scale supply chain management systems. For smaller businesses, seeing a daily or weekly report of items that need to be ordered is sufficient. Having an

See Managing inventory on back

Managing Inventory The importance of your reorder points,

supply chain and EDI

Change in inventory methodsThere were no substantial changes in the tax impact of

altering the method of inventory accounting, but some economic pressures may make the timing more advantageous than in recent years.

The last-in, first-out (LIFO) method has been a boon to income tax savings in inflationary times, allowing companies to deduct the cost of sales at the highest amount possible and maintain their inventory at a much lower valuation using the low cost of purchases from years past.

Inf lation’s relatively f lat rate for the past few years has diminished the difference in that deferral.

Simultaneously, with the move toward conforming US GAAP to the International Financial Reporting Standards (IFRS), LIFO will not be an acceptable method for financial

reporting. IRC Section 472c requires that, if LIFO is used for tax reporting, then book accounting must use that method also. Thus, companies moving toward the IFRS will have to abandon the LIFO method for tax reporting as well.

With the convergence of those two realities, the next couple of years will be a good time to consider making the change toward the first-in, first-out (FIFO) or some other more appropriate inventory method.

You’ll need IRS Form 3115 to report the inventory accounting change with the tax year to which it applies. In most cases, the income tax impact can be spread over four years, beginning in the tax year of the change. Consult your tax adviser if you are considering this change to discuss the tax impact, accounting impact and timing to see if it is appropriate for your situation. – Adam Robinson, CPA

Tax law changes continued from front

Is it time to revamp your marketing campaign?

Spring 2011 Inventory Counts2 Spring 2011 Inventory Counts 3

100 Second Avenue South, Suite 600, St. Petersburg, Florida 33701 www.gsscpa.com | gss@gsscpa.com

(727) 821-6161If we may answer any of your questions on the information contained in this

publication, please contact us.

L ast March we heard a lot about the healthcare act of 2010. What we didn’t hear so much about were the “revenue raisers” that followed in its wake.

One thing to watch out for is the Economic Substance Doctrine. Section 7701(o) of the Internal Revenue Code, which states that when any transaction occurs “to which the economic substance doctrine is relevant” (ignoring federal income tax effects), it will be considered to have economic substance only if:

◆ The transaction changes in a meaningful way the taxpayer’s economic position, and

◆ The taxpayer has a substantial purpose for entering into this transaction.

In other words, you need a good business reason for having made that transaction, other than saving yourself some income tax. This IRS test is one you’ll want to pass. Failure means the transaction will likely not be allowed as a deduction, and you may be subject to a potential 20 to 40 percent penalty. IRS Notice 2010-62 contains more details.

Does your company have independent audits or financial statements prepared? Read on.

The IRS has been demanding to see accountants’ work papers under the Work Product Doctrine. These work papers are used to document income tax accruals for the financial statements – primarily for book-to-tax differences. They also can include issues to support contingent tax liabilities if certain tax return positions are disallowed.

Historically protected as privileged information, it’s no longer clear whether these f iles can be kept private. The Supreme Court declined to review the

Textron case, which has been the most prominent case on this controversy.General business credits extended

Most general business incentives were extended for 2012, but the temporary HIRE Act expired in December. The highly touted Small Business Health Care Tax Credit is available from 2010 through 2013, but only a few small businesses will meet the criteria to benefit from it.Qualified small business stock

If you were fortunate enough to acquire qualified small business stock (between Sept. 27 and Dec. 31, 2010) that gained in value, and if you hold it at least five years, in 2015 you’ll be able to take advantage of the 100 percent exemption for capital gains (including for AMT) under the Small Business Jobs Act of 2010.

More good news: The 2010 tax relief act extends that exemption for acquisitions through 2011.Startup expense deduction

If you started a business in 2010, you’ll be glad of the change in the rules related to capitalizing startup expenses. Through 2009, there was an allowance of $5,000 for this deduction with a phase-out when total expenses exceeded $50,000. For 2010 only, this threshold was doubled to $10,000. Of course, the excess amounts are amortizable over 15 years.

I n s i d e

I n s i d e

Spring 2011➜Is it time to revamp your

marketing campaign?

➜Managing inventory: The importance of your reorder points, supply chain and EDI

See Tax law changes inside

easy way to release these orders to an order management system is a big step forward.

A traditional EDI system will com-municate product codes, quantities and other specifics of the order to major suppliers. The supplier, in turn, will supply an order confirmation with ship-ment date, method of shipment and other information that can be used to update your accounting system.

As an alternative to EDI, Netfira (www.netfira.com) has taken a different approach. Netfira is a Web-based solu-tion that is not accounting-product specific. It integrates directly into the seller’s and buyer’s databases to supply data in real time, providing the most up-to-date information possible. This is unique, in that most EDI transactions do so via batch requests. Netfira’s ability to provide real availability data in real time is appealing.

Simple bar code systems to support inventory management reorder points and EDI automation systems can be purchased and implemented internally from companies like Wasp Barcode Technologies (www.waspbarcode.com). Its products can be used independently or i nteg rated w it h ent r y-level accounting systems like QuickBooks, Peachtree or Simply Accounting up through mid-market solutions like MAS 90 or Dynamics GP.

Suppliers such as Wasp also have point-of-sale systems, plus barcode readers and printers, needed to create a complete system. Automating warehouse, retail operation and/or cash register operations can close the loop for your inventory system, making reorder points more meaningful.

Time is moneyAutomating reorder points and

orders through supply chain tools such as barcodes, EDI or new options like Netfira are conveniences that save management time on routine decisions. This saved time allows companies to redirect management efforts to other issues.

It is relatively inexpensive to buy barcode equipment,

accounting software and supply chain solutions, but

what makes them work are good proce-

dures and proper decision-making.

Automate as many routine decisions as you

can through reorder points, and focus on the exceptions of inventory manage-ment to maximize your profits. – Randolph P. Johnston

Managing inventory continued from inside

Important but possibly overlooked tax law changes

A financial and management bulletin to manufacturers from:

The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS. © 2011 CPAmerica International

Inventory Counts