2018-05-16 10:33:57 Tax Professional English Help your clients account for those products that've been sitting dormant on shelves long enough to become FISH inventory. Retailers and... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/05/Accountant-Explaining-FISH-Concept-Listener.jpg https://quickbooks.intuit.com/ca/resources/pro-taxes/fish-inventory-concept-explanation/ What Is FISH Inventory?

What Is FISH Inventory?

1 min read

If your small business clients are holding onto general merchandise that’s been kicking around for as long as anyone can remember, they’ve got FISH inventory in their supply lines. First-in, still-here items don’t move as expected. They just hang around taking up space on display shelves or in stock rooms. These items still have to be accounted for in terms of insurance and capital cost records, but they don’t add anything to the business. The longer they stick around, the greater they risk losing condition and value. If they become obsolete, they’re worth nothing. The most beautiful leather-bound appointment books in perpetual-calendar format have no value if buyers are only interested in digital appointment records.

Prevention is the first defence against FISH inventory. With help from one of several inventory-management systems, retailers and manufacturers can keep track of how much inventory they have in stock while shining a light on the items that are turning profits. For instance, the SOS Inventory system links directly with QuickBooks for streamlined accounting functions. Inventory monitoring also pinpoints slow-moving products, and sometimes a change in marketing strategy is enough to turn sales around. Inventory that moves regularly and contributes to a company’s success is not going to end up in the FISH tank. But if there are products that don’t add value, it may be wise to think twice about reordering.

A business may have to settle for a loss when it comes to parting with FISH inventory. Even so, after the worthless products have been removed from inventory, benefits appear in other areas. There are time and cost savings when there’s no longer a need to manage nonproductive inventory, and there are income tax gains due to lowered total sales and reduced taxable income.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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