US wholesale inflation soars – wholesalers, distributors, and manufacturers with substantial inventory can improve cash flow.
The Labor Department reports wholesale prices spiked by their largest margin in 27 years in the year to July, rising an annualized 9.8 percent. The report, which set off inflationary alarms on Wall Street, sent US financial markets into a nosedive.
For more than 70 years, and especially in times of inflation as now, the LIFO inventory method has proven to be an extremely effective tax management tool to reduce taxable income and taxes.
The Benefit
In periods of rising costs the LIFO method decreases the value of ending inventory compared to the FIFO method. Lower ending inventory results in higher cost of goods sold which in turn lowers taxable income and the tax liability businesses must pay. This allows companies to use the tax savings to reinvest in their businesses. In summary, the LIFO inventory method, similar to other accounting expenses such as amortization and depreciation, increases a company’s cash flow by reducing income and tax liability.
In a period of rapid inflation as we are experiencing now, if you haven’t yet made the switch to LIFO accounting, now is the time to do so.
We Make LIFO Simple:
What’s more, many businesses may be at risk of calculating the LIFO internal inflation index incorrectly. Your tax department may not have the adequate resources to accurately and efficiently account inventory for tax purposes. With inflation rates at a 27-year high and with increased IRS scrutiny regarding inventory, now is the time to consider an inventory review.
The U.S. LIFO Inventory team at SourceCorp can help:
• As the largest company in North America specializing in LIFO Consulting, we have provided our services, software and consulting to thousands of businesses and their CPAs. It’s our mission to make LIFO safe, easy and cost effective for wholesalers, distributors, and manufacturers of all sizes – our clients have year ending inventories ranging from as low as a few thousand dollars to billions of dollars.
• We take the headache out of LIFO computations and make it simple. We know that tracking costs in various pools of inventory is very tedious, but we combine the research, technology and experience necessary to maximize the benefits of LIFO yielding substantial tax benefits.
• Since 1983 clients have recognized that our LIFO Inventory Team is always up-to-date on all the latest LIFO regulations
• A full-time Account Manager is assigned to each client
• Sarbanes-Oxley compliant
• We will defend our methods and procedures at no cost to your if ever questioned in an IRS audit
• The only LIFO inventory consulting company providing an industry-first 100% guarantee
Free Initial LIFO Analysis – You Have Nothing To Lose & Everything To Gain
In periods of rising inflation and prices, the LIFO method is an effective method of increasing cash flow and reducing tax liability. Now is the time to investigate this cash flow savings opportunity.
Click here for your free LIFO Analysis
About SourceCorp Professional Services
Celebrating our 25th year in business, SourceCorp Professional Services is the leading provider of LIFO Accounting, R&D Tax Credit Studies, Cost Segregation Studies, and Green Building 179D Certification/Analysis in North America. With a specialized team of nearly 70 professionals and with offices located throughout the country, accounting firms realize unparalleled experience, services, and trust. SourceCorp serves many of the nation’s most prominent CPA firms, Associations, and Fortune 1000 companies. For more information, please visit: SourceCorp Professional Services.
