occurred to me regarding inventory management which might or might not
have any impact to the bottom line but would surely have a lot of
inconsistent record keeping.
As anybody who works in any type of business dealing in the sale or
purchasing of widgets knows, there is a very obvious lag time from
when one company ships goods (and it this leaves their inventory) and
another company receives goods (and is thus added to theirs) so there
are a usually a number of days or weeks when neither company counts it
as inventory.
I am not sure what the real repercussions are in terms of balance
sheets, tax liabilities or profits but any salesman will tell you that
their typical busiest billing day is at the end of a billing cycle (be
it month, quarter or year). I would guess that shipping companies
like UPS or FedEx handle more shipments during this time as I'm sure
there are a lot of sales numbers which spike right around the last of
the month
What these 30th day of the month shipments do though is put a lot of
goods into virtual limbo where they are not on either the seller or
the buyers books.
Now obviously there is real value to having inventory and write offs
due to depreciation but having less of it can also allow a company to
show bigger profits on their balance sheets
I'm not asking the IRS to get involved as we have enough complications
as a manufacturing country but would guess that the total amount of
'inventory' held on shelves is grossly understated.
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