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KiddZimaHater
04-27-2014, 12:09 PM
Well, I dove in head-first yesterday.
I started to inventory everything in my shop to keep a permanent record, and to hopefully insure everything.
YIKES!!
You never realize just how much stuff you actually have in the shop, until you start putting it on paper.
I started with the big toys. Machine tools and compressor.
Then listed Lathe accessories, Mill accessories, Surface Grinder accessories. Tooling (taps, drills, dies, endmills, reamers, etc.), Measuring/Inspecting tools, Thread gages, Hand tools, bench tools.... etc. etc. etc.
This was just off the top of my head.
Today, I'll do an actual walk-thru, and see everything I forgot about. :)
I spent the better part of yesterday listing everything, and then finding a replacement cost for each tool online.
WOW!!
Them toys add up.
Anyone else feel motivated to do an Inventory?

john hobdeclipe
04-27-2014, 12:21 PM
...Anyone else feel motivated to do an Inventory?

Yeah, I've been motivated for years. Just haven't done it, though.

kendall
04-27-2014, 12:34 PM
I did it a while ago, it was actually pretty easy for me because I did it while I was moving. Everything I packed was inventoried as it went into crates.
I didn't do it to actually inventory anything, It was just because the new house doesn't have a shop or garage, so it was done to make it easier when I needed to dig something out of a box.
Since then I have started writing things down as I obtain them.

20 years ago, I inventoried my old 24x40 barn, started out trying to get like with like, (hand tools, wood working tools, machining tools etc) and decided it was far easier to simply inventory everything in 8x10ft sections and sort it out on the list later.
Right after I moved here, I got the bright idea to catalog my books, that was a mistake spent over 6 months on it, I never did completely finish.

mooney1el
04-27-2014, 12:45 PM
As I am getting older, I feel the need to categorize and inventory if for no other reason than to make the estate sale easier and more lucrative for my wife or whoever. Started by putting small cards in each toolbox drawer with an approximate value. Since I have laughingly told my wife I paid "$5.00" for some things, I would hate to think she would actually sell for $5:00 :)

I have told my best friend that he'd better get to the shop before all the vultures....

Richard

jlevie
04-27-2014, 12:58 PM
The easiest way to do this for insurance purposes is with good quality photos of every piece of equipment, drawer, or box. If more than a single layer of stuff in a container, spread it out so that each individual piece can be identified from the photo. You will probably need a camera (hi-res digital is fine) with a macro lens to get good sharp pictures from close enough for ID.

SteveF
04-27-2014, 01:20 PM
Or just walk through with a video camera and then you get long shots, close shots of data plates and audio descriptions of the item all at once.

Steve

hoof
04-27-2014, 01:25 PM
What a coincidence, I just started to do an inventory about 3 weeks ago. Filled in 7 sheets of paper from memory. Nothing real costly, mill and lathe were about 1500 combined. but after collecting for 40 years the small stuff has a way of adding up. The real bizzar thing is all I've ever made was more tools. and a nut-cracker. (I don't even eat nuts) I enjoy this hobby alot. But I can fully understand how an outsider has no choice but to look at it as a mental illness. :-/

Hoof

Cuttings
04-27-2014, 01:54 PM
I have had an inventory of my tool for a lot of years, but I cannot take credit for being that diligent.
An employer I had a way back required every mechanic to supply a list of tools for their insurance coverage.
I kept it up and when the shop got broke into of a later employer and all my tools were stolen the list came in handy and I got everything replaced.
I have since upgraded it from paper to a data base on the computer and usually add items to it when they are purchased.
Once you have a list it is relatively easy to keep it up.
I put in the original purchase price which is probably quite out of date now, so I guess I should try and go through it and update prices.
That would be a bit of a job.

KiddZimaHater
04-27-2014, 02:16 PM
I put in the original purchase price which is probably quite out of date now
OOOhhhhh yeah....
While I was doing the 'replacement cost' of each tool, I was shocked by the current prices.
The biggest increase is with Micrometers, Calipers, and Indicators.
And thread gages are astronomical.
Quite the eye-opener.

LKeithR
04-27-2014, 03:30 PM
...Since I have laughingly told my wife I paid "$5.00" for some things, I would hate to think she would actually sell for $5:00...

Yeah, I can see that coming back to bite you; especially if your wife finds out before you die that you fudged on some of the prices. Of course none of the rest of us have ever done that so I guess we're safe...;)

KJ1I
04-27-2014, 04:13 PM
I have inventories of the shop equipment, both the wood shop and metal shop. I included the serial number on serialized tools. I went one step further -- I also took pictures of all the equipment -- all the machines individually, then the tool chests with each drawer open, one level at a time. Then a copy of the list (Word document converted to pdf) and all the photos gets burned to a DVD that is kept at my son's house.

Yea, I know, I'm (insert term here - I can't put in the ones my wife uses).

Edit: And I forgot to add that I scan the receipts I got and include those on the DVD as well.

mayfieldtm
04-27-2014, 04:26 PM
Next Step....

Mount a Laser Pointer in a motorized Gimbal Mount that's Mounted on your Ceiling.
Connect it to your computer with your newly created Database from your inventory.
Have your geeky grandson write some code.

Now you can enter "Where is my Stupid 4" Left Handed Monkey Wrench".
The Laser will point to Drawer #35.

Tom M.

vpt
04-27-2014, 04:33 PM
Or just walk through with a video camera and then you get long shots, close shots of data plates and audio descriptions of the item all at once.

Steve




Thats what my insurance company told me to do. There is no way I would go threw and write everything down, it would take me weeks!

JoeLee
04-27-2014, 04:55 PM
I did rough inventory of stock about 3 years ago. Back in the beginning days I never gave it a thought to do so. As raw materials started to pile up I would say...... I'll remember where I got that piece of steel from and what I used it for........Yea, right. 20 plus years later I have all kinds of stock laying around the shop. Some of it I remember where I got it from and what I used it for as well as what material it is. Now I mark every piece of steel I get, the alloy and where I got it from, the price and what I used it on. Same goes with hardware, nuts bolts etc. As far as hand tools, drill bits, end mills etc. not yet. I don't see the real need to do so.

JL..................

justanengineer
04-27-2014, 06:22 PM
Having lived through a total-loss fire, Ive never seen any point in it. First and foremost I could never afford a policy based upon new replacement cost and secondly I'd never get a settlement at full new replacement cost, only a percentage based upon depreciation which occurs rapidly. Rather than piss about with that I pay for an agreed value policy. If I have a total loss for any reason, I know right now I am not getting rich but will make enough to easily replace my collection on the used market.

Pherdie
04-27-2014, 07:22 PM
I did a video inventory....it was a shocker. What I thought would take 5-10 minutes took almost an hour. I did have the pleasure of finding a few long lost treasures though, but what i mostly found was a lot of items I've accumulated in anticipation of 'someday' use or because I just had to have it.

I need to get rid of those items to make more room for other things I don't need, maybe a chore for tomorrow, or next week, or..........

lane
04-27-2014, 09:07 PM
Yep did that once for my boss . Every thing in my tool boxes at work . for shop insurance . Liked to passed out when I got to the final amount 45,000 dollars. No I do not want to know how much is in my little work shop.Probley 100,000.00 dollars.

CCWKen
04-27-2014, 09:35 PM
Ain't going to happen here. I don't have enough free time on my hands to go counting tools. I'll let the auction house do it when I pass on. I have enough trouble finding the tool I need at the moment. They're spread over a shop and four sheds. :)

garyhlucas
04-27-2014, 11:08 PM
Insurance got mentioned here, so I'll add a little cautionary tale. some years ago my dad was stricken by a stroke and suddenly I found myself running the family electrical business. Now I had to deal with all kinds of people I never dealt with before, like the insurance man. In speaking with him I said something that caused him to ask me if I understood how insurance on the contents of our building worked. He then proceeded to give an example. He said suppose I had $100,000 in coverage on the contents, and good documentation of what was there. If we then had a fire and everything was lost an appraisal would be done. Adding up all our equipment shows that we really have $150,000 in contents, so the insurance company pays us $100,000 and we go with life right? NOPE! The insurance company says we were only 66.66% insured, so they pay us only $66,666.66 for our loss!

So we did a real inventory, because our current insurance amount was in fact $100,000. I found out we had more than $250,000 in inventory, NOT including the $25,000 in inventory on each of five trucks parked in the building! I immediately increased our insurance coverage, and then the other shoe fell. My accountant, seeing an increase in our declared inventory go from $100,000 to $375,000 said that the difference was profit, that we had to pay taxes on! So a fire that demonstrated that we had more inventory than we actually claimed could have also caused a visit from the tax man looking for a whole lot of skin!

J Tiers
04-27-2014, 11:56 PM
My accountant, seeing an increase in our declared inventory go from $100,000 to $375,000 said that the difference was profit, that we had to pay taxes on!

I have a problem understanding that, since you presumably didn't steal that stuff, you BOUGHT it.... actually DECREASING your profits by tying up more $$ in the business than you thought.

Presumably your accountant is thinking of it as money that escaped notice somehow. but presumably if the accountant is worth a tinker's damn, he has already been nosing around to find out where the money he saw come in and can't find went....

The "profit" is the same either way.... either in money, or tied up in goods. Shame on him if he never noticed it.

More likely you have a need to adjust several years of tax paid on inventory that was valued too low. You might owe back taxes on that.

fixerdave
04-28-2014, 12:17 AM
Not relevant to a business, but here's my home-shop take on inventory.

I was organized once, had a photo-database with every tool itemized, envelope printed with manual and original receipts, purchase date and the warranty termination date included. I gave up. Now, I throw all receipts in a box, one per year (or so), and wander around the shop taking pictures every once in a while. Not sure exactly why it all fell apart, but it might have at least been reinforced by dealing with a friends shop estate sale.

I learned three things from that sale:

1) Saving that great piece of stock is not cost-effective if you end up storing it for 20 years and then die.

2) Being hyper-organized, to the point of keeping original boxes, does make it easier to sell the stuff, even after you're dead.

3) The stupid little things a shop likely add up to being worth more than the big pieces of equipment. They're easier to sell too.

Oh, and one more thing. The person selling your shop is either A) not going to get anywhere near what you think it's worth or B) going to keep most of the money made because it's his job and he's willing to take all the time it takes to wait for the right buyer. Unless, of course, your family can find a friend to do the selling.

My takeaway from this: If you plan on liquidating your shop before you die, then, yeah, be organized. Otherwise, just write it off. Enjoy it, use the best material you have for any project, and have fun. Tell your wife it's worth nothing and to just dump it via some auction if you die. It's not worth her stress to try to get what it's really worth. So what if some guy comes on the forum with a tool gloat. If your shop burns down, then - THEN - you'll have lots of time to go through the photos and make your list.

David...

Rosco-P
04-28-2014, 08:15 AM
Even if you have a detailed inventory with purchase price, estimated value, etc., in the event of #2 above, some chiseler will appear and attemp to either purchase the entire lot for pennies on the dollar or use the list to cherry-pick the best items, leaving a whole lot of scrap to be disposed of. Best if that list names one or more friends willing to help with the shop sale and an agreement of what they receive for their troubles.

Best case: give the stuff away to someone starting out. What do you think your 20+ year old lathe, mill, etc. is going to be worth to the next guy? The are many guys who won't buy a used US made lathe today, who is going to buy a 20 year old used chinese lathe 20 years from now?

Weston Bye
04-28-2014, 10:55 AM
Heard a great story yesterday at NAMES. A guy (wish I had gotten his name so I could attribute the story) told of his father, sitting at the lunch table at work, who decided to retire at that very instant. He went to the shop and called all the apprentices over to his tool box, opened the drawers and said take whatever you want, even the box. No old timers were allowed.

The guy telling the story said "Dad, what about me?" when he learned of it. Dad said, "Those boys needed those tools. You, and the older guys at work already had what you need."

No inventory problems there.

Rex
04-28-2014, 11:37 AM
I've been keeping my inventory on a spreadsheet on Google Drive for years. It's one page of an overall Net Worth file to keep track of everything. All the major assets are listed with cost and current value, and tooling is estimated. No way am I going to do detail.

Good thoughts on saving that Good Stock until later. I find myself sending more to the recycle bucket these days. I am also buying new fasteners rather than digging thru the coffee cans.

I'm 62 now, and I intend to reduce my inventory over the next 10 years or so until I have just the best of the machines, and no spares. Right now I have 5 very nice lathes. I tell my wife I have a Lathe Problem just like she has a Shoe Problem.

MRL
04-28-2014, 12:34 PM
The accountant is wrong if he is saying the increase in VALUATION would become taxable income.

http://www.cbiz.com/page.asp?pid=8708

Just one of many references available.

" Any change in how your inventory is valued from your current practice likely will be considered a change in accounting method. Taxpayers must receive advance permission from the IRS to change a method of accounting."

gdavis2265
04-28-2014, 03:27 PM
yea,

Since day one, I've collected a detailed spreadsheet on EVERYTHING in the shop, and I mean everything- with replacement part item numbers as I repair things. Such as what bearing the bandsaw takes, how many on hand, what size /type wheels and arbors for each grinder - even notes on what amps to run certain type of wire in the mig. Lots of extra information It has become a catch all and really handy at times. Easy to just look at a sheet and know what size parting tool insert to order while I'm warm and cozy in the house sipping coffee. Or if somebody at work says 'can you make me one of theses?' - I can look and see if I have an endmill or tap the correct size. I seem to use it a lot. Very handy.


The only problem is the totaled cost at the bottom that reminds me how much I have spent over the past decade!

Ohio Mike
04-28-2014, 07:48 PM
I just did mine for a new policy, it was a real eye opening experience. I started at my computer making a list, and I hit my preliminary valuation before I even made it to the garage to do a walk thru with a notepad! The most important thing is to talk to your agent and be sure exactly what you are covered for. Many standard policies may say they cover up to XX total value of contents as a percentage of the real estate value. However many also have firm value caps on things like tools, guns and jewelry. The agent can write a policy for anything you just need to tell him what you want, he can’t read your mind. For my policy it was as simple as submitting a list. The list included my values for the items I wanted to cover. Some are covered at new full retail price like my wrenches, cordless drill and things I know I would want or need to replace immediately, and others based on used prices.

Baz
04-28-2014, 07:54 PM
I think the items to make notes on are the less obvious items. How often do we see on here an enquiry to identify an odd part. Such things are likely to be considered scrap but are vital spare parts to someone and are no longer available from a manufacturere.
For example 90% of 3 jaw chucks on ebay don't have their outside jaws, machine vices have no handle, and universal dividing heads just never have their gears and banjo.

CCWKen
04-28-2014, 08:47 PM
I have a problem understanding that, since you presumably didn't steal that stuff, you BOUGHT it.... actually DECREASING your profits by tying up more $$ in the business than you thought.

Presumably your accountant is thinking of it as money that escaped notice somehow. but presumably if the accountant is worth a tinker's damn, he has already been nosing around to find out where the money he saw come in and can't find went....

The "profit" is the same either way.... either in money, or tied up in goods. Shame on him if he never noticed it.

More likely you have a need to adjust several years of tax paid on inventory that was valued too low. You might owe back taxes on that.
Ditto. Either that story is BS or he needs a new accountant. Inventory is never considered "profit". I'm not sure he even know what inventory means. It is NOT shop equipment used in business.

garyhlucas
04-28-2014, 09:08 PM
Sorry guys,
I do understand inventory, cash flow, personal injury lawsuits, startups and failures. I paid for my education at the school of hard knocks. When I said inventory I wasn't talking tools I was talking materials. Please speak to YOUR accountant, just because you don't actually count your inventory every year for tax purposes, and instead just throw him a bogus number doesn't mean that the government doesn't consider it profit.

I didn't bring tools into it at all. My dad loved tools, we were electrical contractors and the Greenlee catalog was our equivalent of the Sears Christmas catalog. One day dad commented that the catalog was no fun anymore, we already had at least one of everything in it! At the time of dad's stroke we had five employees. However we already had 4 work vans, a 60 ft bucket truck, an 85 foot sign crane, a 12 ton truck crane, a 40 foot digger derrick, two trenchers, a front end loader, and a collection of electrical tools like you could not believe. I added 12 more employees over the next 4 years and hardly needed to buy a thing. You can't buy a new truck to avoid taxes either. Large items like that need to be depreciated over a period of years.

KJ1I
04-29-2014, 05:42 PM
Apologies, but your account is an idiot. There is no accounting system used that uses inventory value as "profit". At the very worst, it might be classified as unrealized capital gains, not taxible until redeemed. In reality, its effect would only be felt when the inventory is "consumed", based on your accounting model: LIFO, FIFO, RCOI, or ACOM.

Again, I'm talking "profit", and not the absurdly insane, repressive, business killing inventory tax.