For many businesses, taking inventory at an auto repair shop is a tedious chore—but with the right preparation, it can be done quickly. It is required by law and forms the basis for accurate financial statements. This article explains what needs to be done and how software can simplify the inventory-taking process.
Key Takeaways
- Inventory taking is mandatory under commercial law (Section 240 of the German Commercial Code (HGB)).
- All inventory is tracked: spare parts, oils, tires, consumables, and vehicles.
- Census, cyclical, and continuous inventory counts are possible.
- An inventory management system that tracks current stock levels significantly reduces the workload.
What is an inventory count?
During an inventory count, all of a business’s assets and liabilities are recorded in terms of quantity and value as of a specific date. For the repair shop, this primarily means determining how many spare parts, tires, oils, and consumables are actually on hand—and what they are worth. The results are documented in the inventory report and included in the annual financial statements.
Is taking inventory mandatory?
Yes. Under Section 240 of the German Commercial Code (HGB), merchants subject to accounting requirements are obligated to take inventory at the start of their business operations and at the end of each fiscal year. For auto repair shops and dealerships, taking inventory is therefore an integral part of proper bookkeeping.
What types of inventory counts are there?
- Point-in-Time Inventory: Taking inventory as of the balance sheet date.
- Postponed inventory: within a permitted time frame before or after the cutoff date.
- Perpetual inventory: ongoing tracking throughout the year using inventory records.
Inventory in 5 Steps
- Preparation: Tidy up the warehouse; have inventory lists or scanners ready.
- Counting: Recording inventory quantities.
- Valuation: Determine purchase or market values.
- Resolve discrepancies: Check for deviations from the target inventory level.
- Documentation: Create and maintain an inventory.
How Software Makes Inventory Taking Easier
If you manage your inventory year-round using an automotive inventory management system, you already have an up-to-date target inventory level when it’s time for a physical inventory count. In CATAMA, you record goods received and issued on an ongoing basis, so that the physical inventory count is simply a reconciliation. This saves time and makes inventory discrepancies immediately visible.
Frequently Asked Questions
Is a physical inventory required in the workshop?
Yes. According to Section 240 of the German Commercial Code (HGB), businesses required to maintain accounting records must prepare an inventory at the end of each fiscal year—this also applies to auto repair shops.
What needs to be included in a workshop inventory?
All inventory items—such as spare parts, tires, oils, and consumables, as well as vehicles where applicable—are recorded, including both quantity and value.
What is a perpetual inventory system?
In perpetual inventory, receipts and issues are recorded in the inventory ledger throughout the year, so that the inventory level is known at all times.
How does software help with inventory?
An inventory management system continuously tracks target inventory levels. During inventory counts, all that remains is to count the items and reconcile the figures, which saves time and highlights discrepancies.
