Tip #7: Understating Inventory

Understating Inventory

Reporting a lower inventory to their accountant is something many business owners have been doing for a long time. And many accountants just accept the number. In addition to the obvious concerns, when it comes to selling the business, big problems can arise.

How will the inventory be valued in the Purchase Allocations? And who is going to have to pay the various taxes on the larger amount?

Business owners should give their accountants an accurate inventory value each year to avoid troubles at the closing table!

Sign up to receive Toons ‘N Tips by eMail
Learn more about buying a business
Learn more about selling a business