There are multiple reasons why you should care about inventory as a liquor store owner. We can probably all agree on the most pressing reason: Money.
At the end of the year, your liquor store will be taxed on your profits. Any leftover inventory will not only lower these profits, it will increase your tax bill. Any misreporting or loss of inventory is taking money away from your liquor store.
This is the case year-round, but it especially comes into focus during tax season. Inventory that isn’t sold is considered extra income, and is therefore taxable. This includes inventory that is in your system but isn’t on the shelves. If it isn’t on the shelves, the reason could be any of the following:
- Bottles are sitting in the storage room and haven’t been restocked out front
- Someone misreported the bottle counts
- Bottles broke
- Bottles grew legs and walked away (That’s what happens, right?)
At Cheers POS, we came up with an intuitive solution to your liquor store inventory counting problems. After all, you don’t want to pay more in taxes than you need to.
For now, let’s walk through how to conduct liquor store inventory counting so that you don’t have to worry about the looming taxes.
1. Count outside of store hours
This one’s kind of a no brainer, but you should count when the store is closed. Otherwise, all of the sudden a customer walks by holding some bottles when you thought you’ve counted it all.
2. Divide and conquer
You need a team and an organizational plan to help you make the process smoother and quicker. You can divide your team by sections of the store, types of liquor/not liquor, items inside the coolers versus on the shelves, and so on.
There is no one way to divide and conquer so long as your method is accurate and intuitive for your store. Having a segmented process is especially important if the count can’t be completed in one day.
Your count goes directly into the Cheers POS database, which immediately reconciles and shows any difference and discrepancies.
3. Review your count
Make sure the numbers make sense. Do they seem much higher or lower than they should be? Recount if you have to or to be extra safe.
4. Have a POS system that works with you
As we mentioned, our seamless POS system automatically updates your inventory. Everything that is purchased, returned, or damaged will be updated in the system. Once you get your initial physical count out of the way and have scanned your products into our system, leave the rest to us.
If you feel like your liquor store inventory is in disarray and an organized, accurate inventory seems impossible, our partner Monarch Inventory can help. Monarch is a leading provider in inventory management for liquor stores. If their professional inventory managers do your count, they can import that data directly into your Cheers POS System.
5. Cut your losses, literally
Losses are inevitable. Whether the loss is due to theft, broken bottles, or an initial counting error, Cheers POS can help you identify losses and lower your tax bill. This is what makes having an inventory management system lifesaving. You can view loss reports that show these discrepancies in our system.
With the proof in these reports, you are able to write the discrepancies off as losses and they will no longer be fair game for taxable income. Loss prevention for liquor stores has never been so easy.
Make it count
If you need help with preparing for tax season beyond your liquor store inventory counting, check out our 5-step guide to small business tax preparation for liquor store owners.
As liquor store owners ourselves, we understand the beast that is the inventory process. That’s why we’ve made our liquor store inventory software such a big part of our point-of-sale system.
Make it count by scheduling a free demo of our system. As always, our support team is here to answer your questions. Call us, chat with us on the website, or email us to get your questions answered. We can’t wait to hear from you. Cheers!