Bookkeeping for Langley businesses

Two ledgers that have to agree

A business holding stock runs an inventory system and a general ledger, and the recurring failure is that the two stop agreeing. Goods are received into the warehouse system but the supplier invoice posts to a different period. A credit note is applied in one place and not the other. Stock is written off physically with no accounting entry. Individually each is small; together they produce a cost of sales figure that cannot be explained and a gross margin that moves for no commercial reason. Reconciling the inventory sub-ledger to the control account every month is what keeps the two systems describing the same business.

Landed cost belongs in the stock value

For goods arriving through the port and moving out to warehouses in Gloucester, Port Kells or Walnut Grove, the supplier invoice is only part of what the stock cost. Freight, duty and customs brokerage are part of it too. Posting those to general expenses instead of loading them onto the goods understates inventory, overstates the current period’s cost, and makes the margin on every line look better than it is. The practical fix is a receiving process that allocates those charges when goods are booked in, rather than an adjustment attempted at year end when nobody can remember which container carried which charge.

Supplier statements are the control on purchases

Reconciling to supplier statements each month is the single most useful control a distribution business can run, and the one most often skipped. It catches invoices received twice, credit notes issued but never applied, goods invoiced but never received, and prices that quietly changed from the agreed terms. It also produces a payables figure that is actually a payables figure rather than a total of whatever was entered. For a Langley business with a concentrated supplier base, this reconciliation is a short monthly task; left for a year it becomes a dispute with a supplier over records neither side can reconstruct.

Where the sales channels land

Most stock-holding businesses now sell through more than one channel, and each deposits money differently. A retail terminal settles daily, net of card fees. An online store settles on its own cycle, again net. A wholesale customer pays on terms against an invoice. If those all post as undifferentiated sales deposits, the ledger loses both the fee expense and the link between a sale and the stock it consumed. Each channel needs its own clearing account that empties to nil, so a deposit can always be traced back to the orders that produced it. Marketplace facilitator rules cover who accounts for the tax when a platform is involved.

Two sales taxes, two treatments on purchases

British Columbia has no harmonised tax, so a Langley ledger tracks 5% GST and 7% PST separately. On the purchasing side the distinction is about recovery: GST paid is generally recoverable as an input tax credit and never reaches the income statement, while PST paid on goods and equipment for use in the business is generally a real cost that belongs in the expense or the asset. Goods bought for resale are generally acquired without PST at all. Coding those into a single sales-tax account overstates recoverable tax and misstates the cost of the shelving and forklifts it applied to.

Counting stock without stopping the business

A full count once a year, taken at the busiest point of the cycle by the people with the least time, is the version most businesses run and the least reliable one. Cycle counting — a rotating subset of lines checked each month against the system — catches errors while they are still small and while somebody remembers what happened. It also means the year-end figure is a confirmation rather than a discovery. Year-end inventory counts covers what the record needs to show if it is going to support the number on the return.

Remote bookkeeping, one office

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford. There is no Langley office and no local staff, and none of this work needs one: bank and card feeds arrive electronically, supplier invoices are captured by upload or email, and the inventory system is reviewed through your own cloud login. What the arrangement gives you is that the person reconciling the stock control account each month is the CPA who will value that inventory on the corporate return. Monthly versus annual bookkeeping covers how often the work actually needs doing.