Inventory Audits & The Internet of Things

Auditors in the future will never know how good they’ve got it.

Inventory Audit Internet of Things

My first job in accounting was with a local firm in Reno, Nevada. One of the engagements I performed every year was an inventory audit over a telephone pole manufacturer. The manufacturer wasn’t actually a client of our firm. Their full financial statement audit was performed by a firm in California. The California firm just outsourced the inventory counting part to our firm because they were no dummies.

Each year, on the company’s year-end of October 31st, another poor soul and I took a 45-minute drive out to a dusty lot in the middle of the Nevada desert to count telephone poles.

We would arrive at the crack of dawn, armed with a sample selection of certain poles we needed to count, identified by their length and the type of preservative the poles were treated with.

Now, if you’ve made a career of manufacturing telephone poles, it’s probably easy to tell the difference between a 40-foot Creosote-treated pole and a 45-foot Penta-treated pole. For a 20-something staff accountant, this isn’t so easy. And the 10-acre lot wasn’t organized by pole length or preservative. There were just piles of poles all over the lot. Finding a pile and being able to trace it to something we needed to count was a cause for celebration.

Because the employees who worked there weren’t completely heartless, they would occasionally slow down as they cruised by in their golf carts and point us in the general direction of the piles we were looking for. They also gave us wax crayons to mark the poles as we counted. That was great – except for one year when I had a color-blind partner who couldn’t tell the difference between my red crayon and his green crayon markings.

Year after year, I spent a 12-hour day trudging around that lot, marking and counting poles, driving home sweaty, exhausted and reeking of chemicals. But I felt like I was doing something important. I was generating revenue for the firm and performing a vital part of a financial statement audit. If the company tried to claim they had 132 45-foot Creosote poles when they really only had 123 45-foot Creosote poles, I was going to uncover the fraud! (We actually never saw any evidence of fraud.)

After a couple years of being the staff accountant on this job, I got a chance to run the job for a couple of years. After a particularly miserable year, my manager asked me whether I thought we should continue performing the engagement since the working conditions were so miserable. I responded, “Hey, it’s not a fun job, but I don’t mind doing it if it’s profitable work for the firm.”

That’s when I found out that actually, it wasn’t profitable work. The firm LOST MONEY on this engagement every year. And this was the only work the other firm referred to us, so it wasn’t as if we were eating the loss on this one job but making up for it in other, profitable work they sent our way.

WHAT THE?!?!!?? Why were we doing this work?

I’m writing this story down now, because someday soon, poor little staff accountants will never have to count piles of telephones in the Nevada desert ever again. And just in case the wood-preserving chemicals addled my brain, I want to make sure I remember these details so I can be sure to tell those newbie staff accountants how good they have it.

Recently I was ghostwriting an article for a client on which technology will have the biggest impact on how accountants do their jobs. Chatting with my client about the topic, she suggested it’s not just one technology that’s going to have an impact. Rather, it’s the convergence of several technologies bringing together vast amounts of data with machine learning, AI and automation.

After we chatted about the topic a while longer, I started writing the piece, doing a little of my own research to fill in the gaps as I wrote. And as I researched, I realized how closely this topic related to my experience of counting telephone poles in the desert.

I’m not a technology expert, but I’ve had to educate myself enough on the Internet of Things (IoT), blockchain, machine learning, and artificial intelligence to turn a 15-minute conversation with an expert into a 10-page white paper. Here’s a little of what I’ve learned about IoT.

The IoT is made up of billions of devices that all connect to the internet and talk to each other. Think about that FitBit on your wrist, the Nest thermostat controlling the temperature in your home right now, or the smart crockpot that allows you to check on dinner while sitting at your desk at work. By 2020, Cisco and DHL predict there will be 50 billion connected devices making up the IoT.  All of these connected devices generate vast amounts of data.

In retail inventory, cloud-based inventory systems track items in real time. Products have RFID tags that are scanned and identified by the system, giving retail workers (and their auditors) visibility into inventory levels, item location and more.

In the not too distant future, every one of those thousands of telephone poles laying in the Nevada desert will have an RFID tag giving even more information about that inventory. We’ll be able to track a pole from the time it comes out of a mill, through being treated with the preservative, stored on a lot and installed along some remote highway. We’ll know if damage occurred during transit and the exact chemicals and temperatures each pole has been exposed to. All of that information (and more) will feed into an inventory system. Every single pole will have a unique identifier and built-in GPS will allow us to pinpoint the location of every single pole on the lot, in real-time, from anywhere. All of that information will be stored on a blockchain, where entries cannot be falsified or removed.

A staff auditor tasked with auditing inventory won’t have to do test counts of inventory. They’ll be able to reconcile 100% of the inventory to the general ledger in far less time than it took us to drive out to that dusty desert lot.

That’s pretty exciting, right? And good news for new accounting graduates who won’t have to “pay their dues” counting telephone poles in the desert. Rather than spending an entire day counting telephone poles (or any other soul-crushing work that, let’s be honest, clients don’t give a hoot about), they can spend their time focusing on what clients actually care about – running a profitable company.

Auditors of the future will never know how good they’ve got it.

Internet of Things Inventory Audit

Disclaimer: Please note that some of the links on my website are affiliate links and I may earn a commission if you purchase through those links. I use all of the products I link and recommend them because they are companies that I have found to be helpful and trustworthy. Please let me know if you have any questions about any of the products or services I recommend!

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4 Smart Apps to Save Money on Back to School Shopping

This post originally appeared on Forbes.

This week past week has been a whirlwind of preparations for my son to head back to school for first grade. Between supply lists, a few new wardrobe items, a backpack and lunchbox, new shoes and gear for his first season of soccer, we’ve been spending quite a bit.

save money back to school shopping
Photo by Sharon McCutcheon on Unsplash

We were able to reuse some supplies from last year and got like-new soccer cleats at a resale shop. Beyond that, I’ve tried to maximize our savings by taking advantage of a handful of money-saving apps.

Here’s a look at some of my favorites.

Honey

Every time I shop online, I hunt for a coupon code before I hit that “Place Order” button. But scouring the internet for coupon codes can be a huge time suck. Honey handles that for you.

It’s a free browser extension that automatically aggregates and applies discount codes at checkout when shopping online. Once downloaded, the work is done.

Once you’re on a site that is supported by Honey, click on the Honey icon in your browser to see coupons that are available for that store. When you’re on a checkout page with a promo code field, Honey will pop up. You just click Apply Coupons and Honey will automatically try all known coupon codes for that shopping site. They even have some Honey-exclusive codes. If it finds a code that works, it will apply the one that saves you the most money.

Discounts and coupon codes are available for purchases at over 3,000 shopping sites. It will even stack coupon codes when possible, ensuring you get the best deal possible. According to analytics provided by Honey, during August and September of 2017, Honey users spend $2,190,851.61 at stores like Office Max, Staples, etc. and save $1,101,328.88 in that time period due to Honey.

Visit joinhoney.com and download the extension. It currently works on Chrome, Firefox, Opera, Safari and Edge.

Dosh

If you want to make saving money online hands-free, check out Dosh. Unlike other cashback apps, you don’t need to scan receipts, initiate a purchase from their website, or apply coupon codes. Just connect your credit card or debit card. When you pay with a linked card, Dosh gets you up to 8% cash back whenever you make a qualifying purchase.

Currently Dosh gets you cash back at thousands of stores, including Gap, Nike, Target, Sephora, Bed Bath & Beyond, Forever 21, TOMS Shoes, and The Container Store.  and get up to 8% cash back instantly in your Dosh wallet. Brands like

Once you have at least $25 in your Dosh account, you can transfer your cash to a bank account, PayPal or donate it to charity. Visit dosh.cash or download the app on the iPhone App Store or Google Play. Right now, you can earn $5 just for linking your first card.

Spent

Spent is another app that lets you save money on purchased without any extra steps. Simply connect a credit or debit card to the app and earn cash back with you use the linked card with select brands and retailers.

For example, browsing the app right now I see I can earn 1% back at Whole Foods, Costco, Starbucks, Walgreens and Netflix.

You can transfer your cash back to your PayPal account once you have at least $20 in rewards. Since many of the offers are in the 1% range, that may take a while. But since earning happens in the background, it’s just another easy way to save money on shopping you’d be doing anyway without any effort beyond setting up your account and linking your card.

Visit spentapp.com or download the app on the iPhone App Store or Google Play.

Drop

Is your wallet or keychain crammed with loyalty cards? I still have a few but I find I use them less and less now that almost everything is electronic.

Drop can replace most of those loyalty cards. It works by matching up purchases you make with offers you’ve selected on the Drop app. You just link a debit or credit card and select five of your favorite brands. These are usually prominent retailers. I chose Target, Starbucks, Chipotle, Walgreens and Sephora. Choose wisely, because you can’t change your favorite brands once you’ve selected them. But you’ll earn points every time you shop at those retailers with a linked card.

You can also earn points by shopping with certain retailers, linking a second account, inviting your friends to sign up for Drop, and checking out the brand on social media. Once you’ve earned at least 5,000 points, you can exchange those points for gift cards. Five thousand points is worth a $5 gift card.

Visit earnwithdrop.com or download the app on the iPhone App Store or Google Play. Enter code 5dc69 to get an extra 1,000 Drop points upon signup.

Keep in mind, you can often stack rewards from these apps with other coupons or cash back apps like Ebates or BeFrugal. It might take a little research to find the combination of apps and offers that maximize your savings, but even if you just connect your cards in Drop, Spent and Dosh and download the Honey extension, you should be able to earn some decent money back on the back-to-school shopping you’re doing anyway.

save money back to school shopping
Photo by Sharon McCutcheon on Unsplash

Disclaimer: Please note that some of the links on my website are affiliate links and I may earn a commission if you purchase through those links. I use all of the products I link and recommend them because they are companies that I have found to be helpful and trustworthy. Please let me know if you have any questions about any of the products or services I recommend!

Are two incomes better than one?

This weekend I’m going wedding dress shopping with my younger sister. She and her fiance got engaged at the beginning of this summer and are planning an October wedding.

Seeing their flurry of wedding preparations reminded me of a piece I wrote recently for Credit Karma, Are Two Incomes Better Than One for Tax Purposes?

Invest in yourself.Your career is tHe engine of youR wealth. (1)
Photo by Paul García on Unsplash

In it, I cover the changes that occur when you get married and how they impact your taxes. We’re talking filing status, the marriage penalty, ways in which you might actually get a tax break by getting married, and whether it makes sense to file separately from your spouse. (Spoiler alert: it’s rarely advantageous!)

Check it out and let me know in the comments: If you are married, did you have any tax surprises as a result of tying the knot?

Disclaimer: Please note that some of the links on my website are affiliate links and I may earn a commission if you purchase through those links. I use all of the products I link and recommend them because they are companies that I have found to be helpful and trustworthy. Please let me know if you have any questions about any of the products or services I recommend!