Inventory variance

[CTB]

What would be an acceptible +/- margin between annual physical inventory totals & the general ledger for a dual franchise parts inventory of $400,000+? I'm in a small city of app 30k population in the midwest & we've undergone a lot of downsizing whiale experiencing a couple of record months in sales & GP & this, of course, means more opportunity for errors in the daily business.
Thanks for any input.

[CMayne]

I do dailey checks on variances of any given part. I do Not do a monthly reconciliation. Last years anual inventory I came up $2000.00 in the black compared to the ledger. I do not think our new office manager had any concept of "appreciation" but all in all I do not have any complaints on that figure as I am also running $400,000.00 plus inventory with annual sales running from $2.5M to $2.7M a year. Plus or minus $2K could be anything from posting errors on down the line and the owners seem to agree that this is an "adjustable" fugure.

[PartsPlant81]

To put in in perspective for you the last 2 years I have been managing an inventory between $200-220K and have been about $15K over after they do my physical inventory when compared to the financial statement. Most is from appreciation, however some is from selling takeoff parts; handling part number changes a certain way to make $, a couple of other things I don't want to list here You should always be over though unless there is an accounting error.

[Mike Nicholes]

If you are looking for a number; the figure that is accepted by most CPA's is plus or minus 2%; General Ledger to the reconcilled figure shown on the Parts side of the DMS. As for the shelf stock the figure is plus or minus 1% because of the high variance of unit cost among the parts.

Mike