The Case of the Inventory Inconsistencies
This owner doesn’t want to file a tax extension because his staff dropped the ball.
BY CARISSA DUNPHY
Dr. Milton had a problem on his hands and thought to call a fellow community business owner that he had become friends with through their local Chamber of Commerce.
“Hey Winnie, I have a problem that has never happened in the history of running my own practice — I was hoping you could offer me some advice,” Dr. Milton asked.
Winnie responded, “Sure, I’d love to — you’ve helped me so many times — what’s going on?”
“My accountant told me that we’re going to have to file an extension on my taxes because I have not yet provided them with last year’s final inventory — they can’t complete my taxes without it,” Dr. Milton answered.
“I’m familiar with the process — I have to provide my inventory to my accountant, too.” Winnie continued, “Go on…”
“My staff has always completed inventory on December 31 or January 1 so I can provide true year-end numbers. This year, for the first time ever, it’s April and inventory is still not done.” Dr Milton added, “I prepared them by bringing this up in early December, and I’ve reminded them several times since then.”
With an uncertain tone, Winnie replied, “That is kind of abnormal. It’s been three whole months — what’s the problem?”
Dr. Milton sighed, “Every time I ask, the answer is different — I’ve heard every excuse under the sun.”
“It sounds like the why is a whole separate issue.” Winnie continued, “The issue is that you need the inventory done — can you do it?”
“They could do inventory in the same amount of time it would take me to figure out how to do it.” Dr. Milton complained, “I’m only familiar with the exam part of the EHR — the back end. The inventory is in the front end of the system, which is where the staff works.”
Winnie asked, “Can you not report the current inventory? It can’t be that far off…”
Dr. Milton replied, “Last year when inventory was done, it was around net 50 frames off. That’s too far off for my comfort.”
“Oh wow, why do you think it’s off so much?” Winnie responded.
“Throughout the year all the errors add up — but I suppose it could even be theft,” said Dr. Milton.
“Why don’t you take the current inventory numbers and just deduct 50?” Winnie questioned, “That would take your current number and apply the same margin of error from a previous year, likely to get you pretty close!”
“It’s too late to do anything else. I do not want to file an extension — that would keep dragging this out and increase the bill I’ll get from my accountant.” Dr. Milton continued, “Your idea is the closest I’m going to get.”
“I’m so glad I could help you and finally return the favor!” Winnie concluded.
Dr. Milton replied “Thanks so much — I’ve got some numbers to get my accountant! Then, I will have to get to the bottom of why the inventory never got done … I’ll see you at the next Chamber meeting.”
QUESTIONS TO CONSIDER
Did Dr. Milton ask too much of his staff — is this something he should learn to do himself?
Is Dr. Milton’s final solution in his best interest?
What should Dr. Milton do to ensure this doesn’t happen again?
