Small tools can be a large expense for some companies. While not on your balance sheet in inventory or assets, you still should track these. I would like to give you some ideas on how to tracks these purchases. I am going to use a service business for my example, but this can be applied to other businesses.
- Purchases must be authorized by at least one manager. If it is replacing another one broken then the broken one should be given, with the purchase order, to the service manager. If one is missing, unless needed immediately, a report needs to be made and investigated. Store manager must sign.
When the item is purchased it goes directly to the service manager. He will copy the purchase order and receipt. The manager will then record any serial numbers, model numbers, and other information on the copy of the purchase order.
Then the service manager needs to inscribe a tool #, possible po #. Also put company name, inscribed if possible.
The service manager should have a running list of all small tools. This can be done on excel with purchase date, place of purchase, po number, tool number, description, model numbers, and all serial numbers. Also a place if the item is assigned to one employee or where it will be kept. I would also put something in the employee file with their signature stating they are responsible for the tool.
This list must be forwarded to accounting and the store manager. Whenever changes are made the new list must be forwarded. Accounting should keep several old ones with dates last updated.
When employees are terminated for any reasons their toolboxes must be checked to verify nothing belongs to the company. Any tools must be accounted for that were registered to the employee. Depending on management, laws, company policy, is how this will be dealt with.
There should be a plan to take inventory,even partial, once a month.
This is something that will take time but will save you replacement costs. A local CPA firm can help with this among other things. I will always recommend using a local CPA when available. Please check references so you know you have the best.