YOUR INVENTORY RECORD KEEPING GUIDE

Proper inventory record keeping is a necessary tool for a jewelry business to be successful.

SAVES YOU TIME AND MONEY

If you have a loss, your inventory records will prove what inventory has
been lost and its value so your claim can be settled quickly. If you can’t
prove missing items existed, the payment for your loss may be delayed
or possibly denied. In addition, inventory records are required by
your insurance policy.

HELPS YOU WITH PLANNING

Inventory records can indicate when to reorder merchandise and can
help you know what’s selling and what’s not. Your records can also alert
you to missing items and errors in entry, and help deter internal theft.

This guide provides information for all segments of the jewelry industry.
Because each jewelry operation differs in size, method of operation,
and type of finished products, it’s a good idea to work with your
accountant to create an inventory record keeping system that works
for your business.

Use the tips and information in this guide as a starting point for your
conversations.

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 YOUR INVENTORY RECORD KEEPING GUIDE

TABLE OF CONTENTS

INVENTORY RECORDS CHECKLIST MERCHANDISE REQUIRING SPECIAL RECORDING AN ANNUAL

INVENTORY RECORDS PHYSICAL INVENTORY
INVENTORY RECORD KEEPING
REQUIREMENTS Pawned items
MANUFACTURING
Pawned items in default
STORING INVENTORY RECORDS AND WHOLESALE JEWELERS
Estate merchandise
DEVELOPING A PERPETUAL RAW MATERIALS AND PARTS
Memo/consignment merchandise
INVENTORY SYSTEM
LOOSE DIAMONDS AND COLORED
Scrap gold and other metals
CUSTOMER-RETURNED MERCHANDISE STONES PURCHASED IN BULK
Customer repairs
MERCHANDISE TRANSFERRED FINISHED GOODS
BETWEEN STORES (RETAIL) Merchandise that is not invoiced
at the time of receipt MERCHANDISE TEMPORARILY AWAY
MERCHANDISE TEMPORARILY AWAY FROM YOUR STORE
Custom-made jewelry
FROM YOUR BUSINESS
Gold chains and jewelry bought CONTACT INFORMATION
RECORDING A CHANGE IN VALUE and sold by the gram

Loose diamonds and colored stones

purchased in bulk

Giftware, charms, fashion jewelry

Sales of items that do not have

unique inventory numbers

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 YOUR INVENTORY RECORD KEEPING GUIDE

INVENTORY RECORDS CHECKLIST

This checklist will help you determine if your inventory records system follows the recommendations in this program.
Consult your accountant for a thorough evaluation of your inventory records system.

 M
y inventory records contain a detailed listing of all owned stock  I store a copy of my annual physical inventory records off premises.
for sale, customers’ goods, property of others (including customer,
consignment, and memo goods), scrap gold and other metals and  F
or my computer-based perpetual inventory system, I back up my
merchandise temporarily away from my store. files on removable media and store the media or use cloud storage.

 Ikeep purchase invoices, sales receipts, inter-store transfer records,  I

f I use a manual perpetual inventory system, I keep my records
and an annual physical inventory list of all my stock. separate from my merchandise.

 I maintain a perpetual inventory system or an equivalent system.  Istore all of my records, including purchase invoices and sales
receipts, in a fireproof container or safe that does not hold
 I update my records regularly. merchandise.

 I am exact and accurate in my record keeping.  Ikeep a copy of the physical inventory used to report inventory value
on the Jewelers Pak application.
 Iperform a detailed and itemized listing of my physical inventory at
least once a year. Inventory or jewelry lines carried by sales people  Imaintain certifications and grading reports in a separate location
are included in the annual physical inventory. from the diamonds/colored stones.

 My accountant has reviewed my inventory system.

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 YOUR INVENTORY RECORD KEEPING GUIDE

INVENTORY RECORD KEEPING REQUIREMENTS

To comply with the inventory record keeping requirement of your Jewelers Block policy, you must do the following:

1 Take a detailed and itemized inventory every 12 months.

 e define a detailed and itemized inventory as including, but not
W
limited to:
 A
 listing that describes merchandise and links items to their
original source documents (i.e., purchase invoices).
 The value* of each item at your cost. Sample inventory record format
 The date the inventory was taken. With this information, you can maintain accurate inventory records.
You can add other columns to your records if you feel it will help
 T
 he exact total value of all inventory items; not a rounded or
track merchandise. Additional columns could include manufacturing
estimated value.
style number; manufacturer invoice number; type of metal (14k gold,
 T
 he exact quantity (number of units or number of grams) of platinum, silver, etc.); type and weight of stones; customer’s name;
each item. selling price of item; and method of payment.
2 Maintain purchase invoices of all items.
3  aintain a record of the cost of component parts for
M
manufactured (assembled) items.
4  aintain sales receipts that identify items sold by inventory
M
numbers, descriptions, or some other method that will trace the
items to the listing of the physical inventory and the original source
documents (i.e., purchase invoices).
* Throughout this guide, value is defined as your actual cost.

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 YOUR INVENTORY RECORD KEEPING GUIDE

STORING INVENTORY RECORDS

Keep your inventory records for a minimum of seven years. If you have
stock older than seven years, keep the inventory records for that stock
until the items have been sold. Receipts document initial ownership of
an item, while inventory records document the items that have not sold,
now long items typically take to sell and any changes in the value of the
piece while in inventory.
If you have a manual inventory system, keep your records separate
from your merchandise to minimize the chance of your records being
stolen. For a computer-based system, back up your files on removable
media and store the media at a location away from your business.
Store your inventory records, including purchase invoices and
sales receipts, in a fireproof container or safe that does not hold
merchandise.
Keep copies of your two most recent annual physical inventories
away from your business, such as at your home, a bank vault, or your
accountant’s office.

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 YOUR INVENTORY RECORD KEEPING GUIDE

DEVELOPING A PERPETUAL INVENTORY SYSTEM

A perpetual inventory system tracks every item for sale, from the time Take a physical inventory at least once a year. If you update
you receive the merchandise until you are no longer responsible for it. your records regularly, your perpetual inventory should match your
Some items – such as low-valued merchandise, raw materials and parts, physical inventory. Keep a copy of any adjusting entry necessary
chains sold by the gram – have different record keeping requirements, to balance the perpetual to the physical inventory.
which are described later in this guide under “Merchandise requiring
special records.” Unique inventory numbering
Develop an inventory identification system that assigns a unique
In conjunction with the perpetual inventory system, you should retain:
inventory number to each piece of jewelry. Even though two items
 Purchase invoices may have identical makes and prices – for example, two watches –
 Sales receipts each should receive its own inventory number. One exception
is computerized systems that inventory merchandise by using
 Annual detailed and itemized physical inventory stock-keeping units (SKU).
To track your merchandise effectively, maintain your perpetual inventory Similar items are given the same SKU number and tracked by
on a daily basis. quantity. This is an acceptable inventory method.
In addition to keeping records of your own merchandise, keep an Inventory numbers should be assigned in sequence by number,
up-to-date detailed listing of: letter, or letter/number combination. The letter/number system
 Your customers’ goods, if you are a retail jeweler allows you to identify your inventory by categories. For example,
a gold chain could be CH100; a wedding ring could be WR100.
 Merchandise that belongs to others in the jewelry business
(consigned or memo goods)
 Items that are temporarily away from your business

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 YOUR INVENTORY RECORD KEEPING GUIDE

DEVELOPING A PERPETUAL INVENTORY SYSTEM

Inventory codes for categories You may need other categories or subcategories. For instance, under
Assign a code to each category of merchandise. Codes also Category D, Diamonds (loose diamonds), you may want to add a
can be used to refer to specific suppliers. Develop codes that are separate listing for diamonds by clarity.
easy for you and your employees to understand and remember. To be
effective, you must use these codes consistently. The following D.0 Flawless D.6 SI1
are commonly-used codes and their categories: D.1 Internally flawless D.7 SI2

BRC Bracelets G Giftware D.2 VVS1 D.8 I1

CH Gold chains GR Gent’s rings D.3 VVS2 D.9 I2

CHR Charms GT Gent’s jewelry D.4 VS1 D.10 13

CL Clocks LG Lab grown D.5 VS2

CR Rings with colored stones NECK Necklaces

You could refine these subcategories further by including the color of
CS Stones (loose colored) PD Pendants the stones – which should be indicated regardless of clarity – in each
D Diamonds (loose diamonds) R Rings (gold) subcategory:

DR Rings with diamonds WG Watches (gents) D.41 D

EAR Earrings WL Watches (ladies) D.42 E
ER Rings (engagement) WR Wedding rings D.43 F
F Mountings and findings D.44 G

Under each of these headings, you can list all diamonds of that color
and clarity according to cut and carat weight.

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 YOUR INVENTORY RECORD KEEPING GUIDE

DEVELOPING A PERPETUAL INVENTORY SYSTEM

Step-by-step process for creating a perpetual inventory system 4 Record the inventory number on the sales tag for the item.

Information on the sales tag will help track merchandise to
1 When a new piece of merchandise arrives, compare the purchase

the purchase invoice and perpetual inventory. In addition to
invoice to the merchandise to make certain you received the
the inventory number, you may want to include the following
correct item.
information on the sales tag (see example below):
2 Assign a unique inventory number or number/letter combination,

 Unique inventory number
based on your inventory identification system and record the
inventory number in the perpetual inventory system, along  Cost code for items
with the following:
 Category code
 Description of the item
 Retail price
 Date the item was received
 Carat weight, color, clarity of stones
 Your cost for the item
 Supplier code
 Manufacturer’s name
 Quantity or weight
3 Record the inventory number on the purchase invoice you

received with the merchandise and file the purchase invoice.

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 YOUR INVENTORY RECORD KEEPING GUIDE

DEVELOPING A PERPETUAL INVENTORY SYSTEM

5 When an item of jewelry is sold, record the inventory number,


date of sale, customer’s name and address, and selling price on
the sales receipt. (See sample at right.) It also may be helpful to
record a brief description of the item on the sales receipt. Instead
of writing the information on the sales receipt, some jewelers attach
the sales tag to the receipt.
The sales receipt should be a three-part form. Enter the date of the K 480
sale into the perpetual inventory system. Most jewelers also enter
Booklink 4.09 gr
the sale price and divide the form accordingly.
 Part one goes to the customer;
 Part two is filed for inventory purposes; and
 Part three goes to your accountant or bookkeeper.
480

24

504

504

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 YOUR INVENTORY RECORD KEEPING GUIDE

CUSTOMER-RETURNED MERCHANDISE

 ustomer-returned merchandise
C
If a customer returns an item, re-enter the item in your perpetual system
in one of two ways:
1  ocate the returned item’s inventory number in your perpetual
L
inventory. In the Date of Sale column, mark the item returned and
record the return date. Keep the original inventory number for the
returned piece.
2 Create a new inventory number for the returned item, but note

in your perpetual inventory that the item was returned and include
the old inventory number.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE TRANSFERRED BETWEEN STORES (RETAIL)

When transferring items between stores, complete a transfer Record the transfer in each store’s perpetual inventory system.
document. (See sample below.) Location 1 should record the transfer as a sale, as shown below. In the
Date of Sale column, add a code that indicates transfer. For example,
T2 indicates transfer to the second location.

200.00
100.00
400.00

399.00
EAR36 225.00
499.00
599.00 Since Location 2 is receiving the merchandise, Location 2 should treat
the transfer as a purchase. In the following example, the transfer is
Use a three-part form or make three copies. One copy remains recorded in the Manufacturer’s Name column as T1, which indicates the
with the sending location; one copy is sent with the jewelry to the item was transferred from Location 1.
receiving location; and the third copy is forwarded to the home
office, accountant or bookkeeper.

400.00

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE TEMPORARILY AWAY FROM YOUR BUSINESS +

RECORDING A CHANGE IN VALUE

Merchandise temporarily away from your business Recording a change in value

Maintain a complete and separate inventory for items that are temporarily If your replacement cost increases or decreases for certain items in your
away from your business, whether in your possession or in the hands of an inventory, you may amend their values on the next physical inventory
authorized party. (See the example below.) you conduct and provide to the insurance company as the basis for
your premium.

Date Date of If you follow these record keeping guidelines, and maintain and update
Item Rec'd Inventory # Description Cost Sale your system on a regular basis, you will meet the inventory record
3/1/YR WG35 Men's Pulsar Watch 150.00 keeping requirement of your policy.
3/1/YR WL156 Women's Pulsar Watch 150.00
7/15/YR BRC6 18K Bangle Bracelet 500.00

Keep a copy of this inventory listing at your store or home office. A

copy also should be given to the authorized person who will carry the
merchandise. Any activity, such as sales or memorandums to potential
clients, should be recorded on this separate inventory listing. Remember
to include these items in the annual inventory for your business.
All merchandise that is not sold should be re-inventoried when returned
to your business.
In addition, sold items, memorandum goods, etc., should be reconciled
to ensure your inventory is accurate. Inventory or jewelry lines carried by
sales people must be included in the annual physical inventory.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

The following items require special documentation: To document the existence and value of the property, record the
following information at the time of acquisition:
Pawned items
Record pawned items in the manner that meets the requirements of  Name, address, telephone number, and driver’s license number
your local and state laws. For insurance purposes, maintain a record for of the seller.
pawned items that includes:
 A detailed and itemized list of all items sold to you. (You should
 Name and address of the person who pawned the item obtain professional appraisals for any items with values of more
than $1,000.) This list should include:
 Date item was received
 A description of each item
 Description of item
 Your cost for each item
 Dollar value of the loan, plus accrued interest
 The date purchased
Pawned items in default  The name of the seller
After you take legal title to a pawned item, the item should be recorded  The canceled check used to make the purchase. If cash is used to
and reported as owned inventory. The values assigned should be your make the purchase, you should keep records that will identify the
estimated replacement cost value. source of the cash and the exact amount of the purchase price.
Any item that is valued at more than $1,000 should be professionally  In a barter situation, you should keep a specific listing that
appraised. Keep this appraisal with your inventory records. identifies all of the items and values involved in the complete
transaction.
Estate merchandise
If you purchase estate merchandise or other jewelry from a private
party (non-jeweler) for resale, you must be able to verify the existence
and value of this property in the event of a claim.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Memo/consignment merchandise 4 Check with your local authorities about any regulations concerning

1 Prior to sending out memo items, a consignor should research
the purchase and resale of this type of property. Also contact

your attorney to create a legally binding consignment or memo
the consignee:
agreement that includes a legal paragraph describing the terms of
 Conduct a background check the agreement.
 Obtain a credit rating from the Jewelers Board of Trade 5 Make sure the memo agreement includes terms, ex. 10, 15, 30

days. The agreement should be signed and contain a detailed
 Check references
description of the items being memoed. The consignor/
 Secure a certificate of insurance memoholder should keep a detailed inventory on premises of all
 Have a separate, signed written agreement about who is memo goods.
responsible for paying for insurance and shipping 6 In the event of a loss, your Jewelers Mutual policy specifies that we
2 If you take in items on memo, obtain the following:
 will pay policyholders the smallest of the amounts shown below:

 Description and value foreach item from the seller  Your original cost for the property, unless you have valued
this property higher or lower on your last written physical
 Copy of the memo agreement inventory as reported on the application attached to
 Seller’s name, address, and phone number your policy
3 When you accept items on consignment from a customer, the
  The cost to repair, replace, or rebuild the covered property
consignment agreement must show the value the customer will with material of like kind and quality
receive when the items have been sold. Also, maintain records of  The limit of insurance
items that are sold or returned to the consignor or the person who
gave you the items on memo.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Scrap gold and other metals  Keep a daily log that includes the weight of scrap gold
If you purchase jewelry from consumers with the intent to resell it to purchased during the day and the market value as of that day.
a refiner, you can, insure the metals at: Local, state, and federal requirements may specify a more
detailed log.
 Your purchase price
 M
 aintain copies of the refiner receipts to support the usual value
 The market value
of scrap gold and other metals.
 The refiner’s confirmed purchase price
The Scrap Gold and Metals coverage option does not apply to:
Most insurance companies will pay a claim based on how you reported
 Estate jewelry that you will resell to the public
the value in your inventory and on your insurance application and at
each renewal if it changes.  Consigned jewelry
We offer policyholders a Scrap Gold and Metals coverage option. To  Pawned jewelry
insure scrap gold and other metals at market prices, you must:
 Gold or other metals acquired and stored as an investment
 Determine the value of scrap gold and other metals on premises
based on current market prices and enter that value in your
inventory for insurance purposes.
 Report that value on your insurance application and at each
renewal if it changes. To add coverage at the market price before
your policy renews, contact your agent with the highest daily
value. Your agent will inform you of the additional premium
charge for your approval.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Customer repairs  Work to be completed

When a customer brings an item for repair, record information on a
 Estimated cost for the repair
three-part, carbonless job form or envelope. On the form or envelope,
record the following:  Customer’s signature

 Customer’s name  Date the item was received

 Address When accepting an item, check it for damage. Missing prongs,

chipped or cracked stones, cracks in shanks, missing stones, etc.,
 Phone number
should be noted on the job form. When describing the item, give only
 Item description a general description. For example, use the term “white stone” instead
of “diamond” or “yellow band” instead of “14k yellow gold band.”
 Customer’s estimate of
This could prevent you from having to replace a cubic zirconium with
the item’s value
a diamond, in case of a loss.
We also recommend taking a picture of the
If the customer does not want to assign a value, you may leave the line
item with the customer repair document.
blank. The description of the item will be used in the event of a claim.
Give one copy of the form to the customer,
NOTE: If the customer assigns a value that you think is too high, there
leave one copy with the merchandise, and
are two alternatives you may want to consider:
place the third copy with your inventory
records, which are stored separately from, 1 Tell the customer what you think the item is worth and ask the

your merchandise. Keep a separate record in customer to assign that value to the item.
a ledger book or computer record.
2 Decline the job if the customer insists on overvaluing the item.

Overvaluing can be an indication you are being set up for a loss
or complaint.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Merchandise that is not invoiced at time of receipt Gold chains and jewelry bought and sold by the gram
You may receive items that are not invoiced by the supplier until you Maintain a separate ledger for inventorying gold that is bought and
decide to keep them or they are sold. In these circumstances, it’s sold by the gram. Keep a running total of gram weight for various
important to retain packing slips from the supplier and any identification types of gold, such as 14K or 18K gold. This system is similar to
numbers from packages, such as air bills or shipper numbers. If a loss balancing a checkbook.
occurs, these records could be used to determine which non-invoiced
items from the supplier were in your possession.
Custom-made jewelry
If you custom make jewelry, record the following in your perpetual
inventory:
 Cost of component parts
 Supplier of component parts
 Invoice number of component parts
 Value of your time to design and manufacture the item
 Date when the item was completed
As an alternative, you can value custom-made items based on
your wholesale price (the price you offer retailers) minus your
profit percentage.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Loose diamonds and colored stones purchased in bulk Under .20 carats: Stones of this size that are equal in color, cut,
Maintain a separate ledger for loose diamonds and colored stones. clarity and carat weight can be inventoried by weight. If they are not
.20 carats and more: These stones should have individual equal in color, cut, clarity and carat weight, then each stone should be
inventory numbers (See page 7 for descriptions of category codes). individually identified with an inventory number.
Recording merchandise by individual inventory numbers is shown on
Type of stone: Round Brilliant Quality: VS
the next page.
Size: .15CT Inventory Number: LD-DI0357

Cost

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE REQUIRING SPECIAL INVENTORY RECORDS

Record the lot of diamonds in your perpetual inventory as follows: Sale of items that do not have unique inventory numbers
When you sell gold, diamonds, giftware, charms, or other items that
do not have a unique inventory number, record the gram, carat weight,
or quantity on a sales receipt, so it can be subtracted from the
running inventory record. In addition, record the date of the sale,
customer’s name and address, a brief description, and selling price
on the sales receipt.

Giftware, charms, fashion jewelry

Record the quantity of these items on your inventory. Although 292 50

identification of each item is not required, maintain all documents for 360 00

these items. The sales tag should include the category number of the 146 25

item, its cost, and gram or carat weight if applicable.

798 75
39 94

827 69

827 69

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 YOUR INVENTORY RECORD KEEPING GUIDE

RECORDING AN ANNUAL PHYSICAL INVENTORY

You now have the necessary tools to establish and maintain detailed, accurate records.
If you do not have an acceptable perpetual inventory system, now is the best time to develop one. If you update
your records regularly, your perpetual inventory should match your annual physical inventory.

1 Begin with all of your stock labeled, identified and priced. Your The annual physical inventory should include the date inventory was
sales tags should include category numbers which indicate the taken, the category number, and each item’s inventory number, quantity,
type of merchandise. Category numbers are helpful because it’s and brief description, as shown below.
convenient to record your annual physical inventory by category.
Keep a separate record for each category. Category #: CH Inventory date: 12/31/YR
Employee: Jeff Brown Date: 12/31/YR
Sales staff jewelry lines and scrap gold measurements should be Employee: Sue Phillips Date: 12/31/YR
included in the annual physical inventory.
2 Gather all merchandise from each category into separate areas.
5.5gr 250.00
This prevents the need to re-inventory categories if merchandise 2.3gr 105.00
is missing. 3.3gr 150.00

3 Work in teams of two, with one person reading the tags and
another person recording the information onto separate inventory
There is no need to provide complete descriptions of items listed in your
records either on paper or by computer.
annual physical inventory. The inventory number is sufficient to find the
purchase invoice, which gives a complete description of that item.

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 YOUR INVENTORY RECORD KEEPING GUIDE

RECORDING AN ANNUAL PHYSICAL INVENTORY

4 When a category has been inventoried, check it for accuracy.

If the number of items and dollar values match, place the
merchandise in the safe, vault, or under your showcases. This
prevents merchandise from being inadvertently recounted or
mixed into other categories.

5 After all items have been inventoried, complete a cover sheet,

similar to the one at right. (See page 7 for descriptions of
category codes.)

6 Compare the perpetual inventory value to the physical total.

7 Store your annual physical inventory in a fire-resistive container

or safe that does not hold merchandise. Keep a copy of the
last two annual physical inventory in a safe place away from your
business, such as at your home, accountant’s or bookkeeper’s office, Perpetual total
or in a bank safe deposit box. You will need the exact total for your Difference
Jewelers Block insurance application or at time of renewal.

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 YOUR INVENTORY RECORD KEEPING GUIDE

MANUFACTURING AND WHOLESALE JEWELERS

Jewelry manufacturers and wholesalers differ in size, method of  Maintain purchase invoices of raw materials and merchandise.
operation, and type of finished products. It’s difficult to recommend
Maintain sales receipts, which identify items sold by inventory
 
one inventory system that will work for every business. Many of the
numbers, descriptions, or some other method that will trace
recommendations listed earlier in this guide apply to manufacturers and
items to the listing of the physical inventory and the original
wholesalers; some do not.
source documents (i.e., purchase invoices).
We offer the following recommendations for manufacturers and
 epending upon your business, you should also keep a detailed list of
D
wholesalers and encourage you to consult with a professional
merchandise that:
accountant when establishing or reviewing your inventory record
keeping procedures.  Belongs to others in the jewelry industry, and

Take a detailed and itemized inventory once a year.

   I
s temporarily away from your business, whether in your
possession or in the hands of an authorized party.
This includes, but is not limited to:
Assign inventory numbers to your merchandise. You can create

 A listing, which describes raw materials and parts, samples,
inventory numbers of categories, such as type of merchandise (gold,
finished goods, and merchandise in such a manner that
loose diamonds, etc.) or supplier. Use a method that works best for
will trace items to the original source documents (i.e.,
your business.
purchase invoices).
Assign inventory numbers in sequence by number, letter, and or letter/
The value of raw materials and parts, samples, finished goods,
 
number combination. Be sure to develop consistent codes that are easy
and merchandise.
for you and your employees to understand and remember.

 The date the inventory was taken.
The exact total value of all inventory items; not a rounded or
 
estimated value. Inventory or jewelry lines carried by sales
people must be included in the annual physical inventory.

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 YOUR INVENTORY RECORD KEEPING GUIDE

RAW MATERIALS AND PARTS + LOOSE DIAMONDS AND

COLORED STONES PURCHASED IN BULK

Raw materials and parts Under .20 carats: Stones of this size that are equal in color, cut, clarity,
Raw materials and parts include precious metals, plate, tubing, shot, and carat weight can be inventoried by weight, as shown below. If they
findings, unset mountings and similar materials used to manufacture are not equal in color, cut, clarity, and carat weight, each stone should
jewelry. It’s easiest to inventory this type of property by weight. As receive an individual inventory number.
material is used, subtract the weight from the inventory. When new
material is purchased, add the weight. Additions, subtractions and Type of stone: Round Brilliant Quality: VS
balances should be recorded daily, as shown below. Size: .25CT Inventory Number: LD-DI0357

Type of metal: Gold Inventory number: G-MR100

1,215.00 10,890.00
765.00 10,125.00

Loose diamonds and colored stones purchased in bulk

.20 carats and more: Each stone should have an individual
inventory number. Below is an example of recording merchandise
by individual inventory numbers.

Stones - Loose Diamonds (Category D.11)

Cost

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 YOUR INVENTORY RECORD KEEPING GUIDE

FINISHED GOODS

Finished goods When you manufacture a large quantity of an item and the cost of parts
Record all jewelry items that have been completely manufactured in the and labor have been recorded, keep a running inventory to track your
finished goods category. Assign an inventory number to each item. The merchandise as shown below.
following examples can be used to track custom-made items or similar
Inventory Number: ER456
items that are mass-produced. Your inventory records should include
each item’s value, which includes cost of component parts and labor.
2,500.00
4,000.00 6,500.00

400.00
75.00
When items are sold, record the inventory number on an appropriate
sales form and delete the items from your inventory.

Inventory Number: ER456

2,500.00
4,000.00 6,500.00
600.00 5,900.00
200.00

650.00 104.00

104.00

779.00

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 YOUR INVENTORY RECORD KEEPING GUIDE

MERCHANDISE TEMPORARILY AWAY FROM YOUR STORE

Merchandise temporarily away from your store

Maintain a complete and separate inventory for items that are
temporarily away from your premises, whether in your possession
or in the hands of an authorized party, such as a commissioned
salesperson. Your inventory records can be recorded in the same
manner as shown in this guide.

QUESTIONS?
Contact your agent or Jewelers Mutual if you have additional
questions or want help finding the best fit for the needs
of your business.

800-336-5642, ext. 2118 or [email protected]

For more information about coverage and service offerings,
visit JewelersMutual.com.

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