Clearly the ATO considers that stock is an asset.
After all, all of us must declare the value of our stock (if we have any) in our Balance Sheets. But if the stock is out of date, has been damaged or no one wants it, it is more likely to be a liability NOT an asset.
Stock that has “no stock turn” over the past year, is taking up space in the warehouse and may never be sold. It therefore should have no value.
WRITE IT OFF AND GET RID OF IT !
Buyers use the rule of thumb that any stock that is more than 12 months old is not wanted when they are buying a business. They are concerned that they too might get stuck with it and have to write it off and suffer considerable financial loss. Smart buyers just don’t want old stock.
BE PROACTIVE.
Identify any old, damaged or slow moving stock and create a plan to get rid of it. NOW !………. YES NOW !
My top tips
- Start a sale to end all sales.
Label any item more that 12 months old and get rid of it - Either send it back to the supplier, sell it at a discount off the normal price, sell it at cost, or sell it at less than cost if need be.
- If there is no interest after a few months sell it at 50% of cost. It must go.
Anything is better than nothing. - If it is perishable watch the dates. Stock that is passed its use by date is worth nothing and it may end up costing you money to get rid of it.
- If after 9 months you have not been able to get rid off it. DUMP IT and move on. Write it off to experience and restock with new fast moving lines
A clean stock position will make your business easier to sell