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Inventory and figuring P&L Correctly

Discussion in 'Irrigation' started by zman9119, Jul 30, 2013.

  1. zman9119

    zman9119 LawnSite Senior Member
    Posts: 756

    We purchase items from anywhere from 3-5 vendors regularly and each of them have a different price point per item. We stock anywhere from 700 to 1,500 items on a good day give or take.

    What is the best solution everyone had found to knowing a true profit off an item when you could be using an item from each of these vendors and not know it?

    I am looking for some ideas on how everyone else figures this out so I can bring it to my boss and show it is not as simple as a tree purchase and knowing exactly what the items are.

  2. bcg

    bcg LawnSite Bronze Member
    from Tx
    Posts: 1,835

    Best solution is to have software that keeps a full inventory and you can setup to either do cost averaging, last in first out, first in first out or whatever you want for job costing. This requires that someone take the time to set it up and that the techs either have the ability to update it as they go or keep accurate records for someone at the office to update daily or weekly.

    I have software that does this and has the ability to update as the techs write an invoice but have found the preparatory work of getting the inventory setup initially to be overwhelming. I keep saying I'm going to do it over the winter but I never can force myself to actually do it...
  3. cjohn2000

    cjohn2000 LawnSite Senior Member
    Posts: 554

    Are you and your boss partners in business?
  4. zman9119

    zman9119 LawnSite Senior Member
    Posts: 756

    I am bringing this one back to the top as I am still looking for some insight on this issue...

    We do use Hindsite so it does have the inventory option with Quickbooks but with running multiple crews and purchasing constantly, it has been hard to keep an *accurate* inventory between service and install work.

    My bosses are wanting to be in the 97-99% range for accurate inventory on hand versus the 80% we run right now.

    They run landscaping; I run irrigation. Obviously it is harder in the service industry to keep up with everything since we do not know what we are getting into before we dig it up on service calls, and purchasing in non-case\bag quantities makes me feel like an a$$ to our vendors plus it is harder to manage random parts all over the place.

    No I am a department manager
  5. Kiril

    Kiril LawnSite Fanatic
    Posts: 18,308

    Easier said than done. If you want accuracy, you need to track item movement at all points. In/out of the warehouse, in/out of the truck and sold. If you don't have a system in place to do that, then you need to figure out how to track the items in a fashion that can be easily linked to a database.
  6. zman9119

    zman9119 LawnSite Senior Member
    Posts: 756

    As you said, easier said than done...

    It just seems like a huge time consuming issue.

    You would almost need a full time person just for inventory, especially on installs where no matter how well you plan, thee will always be field required changes and you would almost have to have someone sitting at the truck(s) not allowing anything out without someone tagging it that it was removed from inventory.

    Service calls are not that bad since they do enter all their parts into the computer, but installs are the worst.
  7. SoCalLandscapeMgmt

    SoCalLandscapeMgmt LawnSite Bronze Member
    Posts: 1,829

    This is EAXCATLY the same thing that we struggled with when we tried to track our irrigation materials inventory. We finally gave up and started clamping down on the purchasing of materials and that helped with our issues greatly. We only have one person who is allowed to purchase irrigation materials and if a tech needs something that he doesn't have on his truck or that we don't have here at the warehouse then we will call in the order to the supplier and he can go and pick it up. Our issue when we were bigger was that we had materials the we knew were walking out the door but at the time it was damn near impossible to get a handle on.

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