Tax Tip #11: Remember to stocktake

Most businesses will need to do a stocktake at the end of each financial year if they have an inventory of goods and if annual turnover is more than $2 million. As a compulsory requirement by the ATO, a stocktake should involve recording this following information:

  • Description of individual and total stock
  • Value of individual and total stock
  • Market cost and value of stock (if you qualify for GST credits)
  • Person who conducted the stocktake
  • Method of stocktake
  • Date of stocktake
  • Person who valued the stock
  • Basis of stock valuation

Stocktaking will also help you determine how much demand there is for your products and how much, if any, you will need to order for the next financial year. This will also help you assess if a particular product line is doing well or not, so you can eliminate or discount the excess stock.

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