Why do people need a home inventory? That is a question that was posed often seven years ago when my husband and I started our personal property inventory business, and still asked of us today. Thus began our mission to educate anyone who would listen.

Speaking engagements are one method to provide this information. We (my husband and I) jokingly state that we’ll speak for food! This is because most organizations – Kiwanis, Sertoma, Rotary, Lions and Exchange Clubs meet either during breakfast or lunch, and we’re invited eat before we speak.

We also present to Chambers of Commerce, switching up the general information to an agenda that is more business-focused. Lunch-n-Learn meetings for professionals and a CPE course for CPAs are additional outlets to provide this important information.

I also write articles for article sites, including SelfGrowth.com. Posting informative articles written by insurance agents, CPAs and other professionals on my blog brings additional knowledge for my readers. Guest blogging for others’ blogs is another avenue in which I can educate those I would not normally have the opportunity be in front of. All of this, to help educate others on the need for a personal property inventory.

Few people know that even if they have insurance, they would still need to provide a list to their insurance company when they filed a claim after a loss. The same is true for a police report after a burglary. Every insurance agent we ask confirms that they tell every one of their policyholders that they need to compile of list of the contents of their home or business. Some even hand out a booklet or worksheet so their clients can provide that information when that horrible time comes – fire, natural disaster or burglary. Unfortunately, few people remember their agent encouraging them to create an inventory, let alone actually do one.

The insurance company will provide the funds to replace the lost or damaged items, but only if you provide them with, item by item, a description, when you bought it and what you paid for it. And often they also require proof (photos are perfect) of ownership. Likewise, the police will ask for serial numbers or possibly photos to assist them in recovering what was stolen.

Pulling all of that information together can be a horrible experience, and emotions can make it even more difficult. Think about how you will feel if you are in the middle of your own house that was just gutted by a fire. You will be stressed, tired and worried. Your concern about the financial recovery will weigh heavily on you. Consider, under those mental conditions, trying to provide a complete list to your insurance company. Then consider the difference you’d experience, emotionally, physically and mentally, if you could tell your agent you have an inventory and you’ll have it to him or her within a couple days. It’s worth your time if you do your inventory yourself, and well worth the cost to hire an inventory service provider if you don’t want to create your own.

The same is true regarding divorce, moving, or placing items in storage. When you need to provide a list of your personal belongings, for whatever reason, you certainly want to have that information together beforehand. Creating the list when under emotional stress will only result in a less-than-thorough report. When you’re dealing with other personal issues, your time is taken up by those needs, and you won’t have the availability to do any one thing to the degree you normally would.

It is just as important for business owners to have a personal property inventory. Often called an asset inventory, too many businesses don’t have the information they need for a variety of situations. Often, this is an oversight. More frequently, though, we find it’s because the small business owner just doesn’t have the time to complete one.

In addition to the reasons listed above, a business has additional needs to know what they own. First is filing a Personal Property Tax Return. Without a complete asset list, it’s impossible to know what amount to claim on your return.

An inventory also can serve as a means to track the assets and possibly prevent unnecessary purchases. We toured a business to provide a quote for an inventory, and when opening a closet door the manager discovered ten very nice wooden easels that cost over $200 each. Sheepishly, he stated that he just purchased ten more because he wasn’t aware they still owned these. This lack of documentation resulted in an unnecessary $2000 expenditure.

Another key reason for having this document prepared and up to date is to provide a list to a bank. I was told of a business man who needed a line of credit to assist with cash flow. The bank requested an itemized asset list to determine the value of the business and most likely to use these assets as collateral. It took this business man almost a month to provide this information, and by then the interest rate had increased, and his cash flow had seriously diminished.

There are additional reasons to create a personal property inventory, but these are the most prevalent. The time or money spent having this information readily available is minor to the financial repercussions that could come from not being prepared.

Author's Bio: 

Cindy Hartman is President of Hartman Inventory, a woman-owned business that provides business and home inventory services. She and her husband Mike own Hartman Inventory Systems, a complete turnkey home inventory business package for those who want to establish their own inventory company. Hartman is also a distributor for MonaVie, the leading network marketing company in the health and wellness industry. www.HartmanInventorySystems.com; http://behealthywealthyandwisellc.mymonavie.com/