I was fortunate enough to have spent some time with a number of people who were badly affected by the 2011 Brisbane floods and we have all learned some important lessons that I want to share with you. One of the big lessons that was learned was that no matter what sort of business you are in, if you have product you sell, you need to ensure that you keep your inventory up to date.
There were many businesses like electricians, plumbers and construction companies that often buy products for projects but don’t store the excess items in their stock. The result was that when the flood occurred in many cases it wash away everything that was in the warehouses and the consequence was that the insurance companies denied their claims for those items cause they couldn’t show that they were in the warehouse.
In some cases the losses were in excess of $100,000. This means it is very important that if you have collected items that you do put them into your inventory. If they are not there then ensure that you do an inventory adjustment and put them into your system because the items are real assets and if lost could affect the long term viability of your business.
I recommend that at the end of each week you print a copy of your Inventory Valuation Summary report and put it with your backup copy of your Quickbooks file. This means that even if your file doesn’t work you have proof of the inventory. The other thing I recommend that you do is to take a photo of your business and its stock at least once a month to show what you had in your premises as evidence.
This evidence maybe all that is needed to give the loss adjusters proof of your actual losses.Chris Le Roy