Abdur Rahman ibn Yusuf Mangera – Simplified Zakat Guidance Business, Assets and Inventory
![Abdur Rahman ibn Yusuf Mangera](https://artwork.muslimcentral.com/abdur-rahman-ibn-yusuf-mangera-150x150.jpg)
AI: Summary ©
AI: Transcript ©
Bismillah R Rahman r Rahim, the point about zakat that I want to
cover now is the garden businesses. So I'm going to give
you an example of a small business and maybe a larger business. And
to understand so number one, in a business, or in assets in general,
everything that is considered to be wealth doesn't mean that it's
acceptable. So for example, if I've got a very expensive jacket,
somebody sent me a message the other day that they've got an
expensive watch is there as I got an expensive watch, anything that
you use for your personal needs, watch a car, and you have two
cars, and you basically need them for your personal needs, then
there is no skeleton that anything which is business oriented that
you purchase for business. Now in a business, you actually have two
types of aspects. Number one, let's just say you've got a larger
business. So you've got machinery, let's say you're baking cakes. So
you've got an oven, you've got to mixer.
You've got you've got maybe a scale, you've got spoons and
ladles and tins, and, and, and so on. And then you're gonna have
things like flour, you're gonna have sugar, you're gonna have
butter, you're gonna have the ingredients, the sultanas, the
raisins, chocolate, for brownies, or whatever else that you know,
people put in there, right? Or apple crumble, you're gonna have
apples, or whatever it is, right? Maybe, you know, getting a bit
tempted with this kind of stuff. So then you're gonna have maybe
cake cake boxes that you deliver the cakes in, maybe cake. Would
you cook cake cases in which you make your cupcakes and things like
that? Like, why do I know so much about cakes? Subhanallah just an
example. Right? So now, in the business, you only have to take a
value of the socketable assets for you to base a cat on the countable
assets of a business on let's start with nuns accountable.
First, the nones accountable assets in a business are anything
which is fixed, that doesn't need that will not go out to the
customer that you just use to manufacture or to do your business
with. So for example, your machines, you don't sell them,
they just use for your mixing, and so on your oven, your gloves, and
anything else that is use cases, you're going to give them to the
customer. So that will be marketable. So it's the countable
assets are those which eventually become final product. So your
sugar, right? Your butter, all the ingredients, your sprinkles,
right? And all of that kind of stuff with whatever is going to go
down, including cases, boxes, and so on. Will the car be will your
car that you do deliveries in? Will that be accountable? No. If
you've got a business car, it's not accountable, right? Or let's
just say you're doing a bigger business, whatever it is, somebody
sent me a question the other day about a a garment business, they
are the buyers and so on and he jobs. So again in there, you're
only going to pay not on the racks where you store your abayas,
right, but if you got plastic plastic coverings for the ABA that
you send out, for protection purposes to your customers that
will be accountable. So anything that eventually goes to the
customer that you sell, that will be part of your sale, all of that
is accountable, but your racks and rails and storage boxes, or
whatever that will not be because that is for your own storage, not
for sending to the customer. Aside from that, the other thing that
you need to also that is also as accountable as any money in the
business, any cash minus any debts. So if I am holding 5000
pounds in the bank, but I owe 3000, right to suppliers, and
that's all I have, then that means I only pay zakat on 2000. Because
the 5000 is not all mine 3000 have to go out. Likewise, if there's
money due, so I've got 5000 in the bank, but there's 2000 that is
owed to me by my customers that is also accountable minus any debts.
So if I've got 5000, I'm owed 2000. But I owe 3000 to my
suppliers, then that would be 7005 plus two, five in the bank to that
I'm going to receive is a business debt. So the very strong debts,
and that seven minus three that I owe, so that means I'm going to
pay zakat on 4000. Now, another complication comes is what about
stock that I've ordered? And it's been manufactured right now, I've
I've either paid for it, right? I mean, if I paid if I haven't paid
for it, then it's going to be money doing that you can just
probably ignore anyway. But if I've paid for advanced payment to
make a bias for me, advanced payments to make, maybe supply me
with 200 cakes, whatever, right? Or 200 books, I've maybe through
white for the press, we've already given the printer and order, right
that I want 2000 copies 3000 copies of the marriage book, I've
maybe even paid them. So if I paid them now, that means the books are
going to come that's business asset that is also going to be
accountable. Question is what price is that going to be
accountable at? So basically you can just take the cost price if
I've paid 3000 pounds, right or 5000 pounds, then that is going to
be the
marketable assets, because that's still my money, right? I'm going
to get the money back if they can't supply or I'm going to get
the books back, or I'm going to get books in return for it. Right?
So that's very strong. That's why you have to pay on any stock that
you've ordered, right? Which you've paid for, then you have to
pay for that. Now, if you've got inventory, right, like you're
selling, you're selling pens, for example, right? Are you selling
cakes? Or at what price? Do you what price do you give to your
cake casings, or your flour or whatever, obviously, whatever the
flour. Pricing is, that's what you give it. If it's finished
products, like books, let's just say I've got 300 books sitting,
which I haven't sold yet, I need to generally take the price, I
need to value that for socketable purposes, at the price that I
expect to sell them at. So if I'm going to sell them all in retail,
10 pound apiece, the marriage books, for example, 10 pound
apiece, then I need to value that that I'm going to receive 10
pounds each 200 bucks or 10 pounds is going to be what 2000 pounds.
So that's going to be my now if I think I'm not going to sell all of
them on retail, but I'm going to sell them on wholesale, then I
take the wholesale price and I pay zakat on that if I think that I'm
going to sell 50%, retail 50% wholesale, then I can do it
according to that. That's generally the idea that your
inventory should be priced at either its cost price, if it's not
a finished product, at what you can maybe even sell it at right
now. If it's finished products, then it's the retail price.
Because obviously if you're going to look at just the individual
prices, or the flour cost me this much the reasons cost me this much
the butter cost me this much, then that cupcake is going to cost you
20 Pence, right? Whereas you sell it for one pound 50. Right. And
you know, you're going to sell this tomorrow, right for one pound
50, right? $1.50, whatever. So that means you're, you don't pay
at the cost price, because you expect him to sell this at one and
a half. So that's the price you generally take. But if it's still
raw products, you can just take it at the price that you would sell
it then at raw products doesn't have that much value. So hopefully
that clarifies in terms of general business of course there's a lot
more complicated business scenarios, but this will do for
most businesses that people will be doing in sha Allah just like a
lot here.