All of us want to purchase ice melt products at the lowest price, but unfortunately our “saving” mentality is lost as soon as the first snow falls. Accounting is not for all of us, but for those of you that own snow removal businesses or are responsible for your division’s budget or profit & loss, accounting for salt usage will reduce costs, increase profits, and reduce the harmful effects on our environment, i.e. no brown grass or contaminated waterways.
Your salt accounting will be straightforward enough when you have the right numbers to calculate: Beginning Inventory (in bags or tons) + Purchases – Net Usage (weight of salt sent out + weight of salt left over in the trucks) = Ending inventory. Your bank and accountants call this a perpetual inventory system. There are a few factors you want to determine before the season starts.
-How much salt you are putting in your spreaders?
-How much salt each property should have applied to it per event.
-What application rate you should be using according to weather conditions.
Let’s discuss ways to measure the inventory going out of your pile.
You can figure this out by knowing the volume or the weight your spreaders hold. You must know how much salt you are sending out with your trucks, how much salt should be applied and how much salt IS applied (salt sent out minus the salt left after the truck returns).
Also, for QuickBooks users, QuickBooks does a great job in tracking inventory by using purchase orders and item receipts to track the bulk salt purchased and sales orders with invoices to track salt used. Some versions of QuickBooks allows you to track inventory by location.
Download A Salt Accounting Excel Spreadsheet Here
How To Measure Salt Going Out
If you are using a skid steer/bobcat to load your v-boxes, lets figure out how much salt it holds with a level top and a level bucket (yes use a level to make sure).
- You can do this by emptying pre-measured bags of rock salt into your bucket: (# of bags that fit * weight of bag = Lbs of salt in your bucket. This could be a lot of bags and for less accurate estimates you don’t need to open the bags of salt.
- Another common way to weigh the salt that fills your bucket is to find a truck scale (common locations are certified truck stops and garbage dumps) weigh your truck with an empty vbox. Then add one full, level scoop (this is the measure used when filling truck before events) from your bucket to the v-box and reweigh your truck. Subtract the weight of the truck from the weight of your truck with the salt.. (Before the season starts is the best time to check calibration of your spreaders..)
- A less accurate method- Do you know the volume of your loader bucket? Salt weighs about 75-80 lbs per cubic foot. There are 27 cubic feet per cubic yard. If you bucket is a one cubic yard bucket that would mean, 80lbs of salt(one cubic foot *27 cubic feet = 2,160 lbs per scoop.
Now you know when you send out a truck, exactly how much salt is in your V-box’s which will result in knowing your cost per salt application.
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