Wed. Jul 8th, 2020

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How to Manage Inventories in Effective way

2 min read
Managing inventory is an important part of every business. However, many businesses do not manage...

Managing inventory is an important part of every business. However, many businesses do not manage this well when it comes to the products they sell. To make your business run smoothly, you must know everything starts from how to manage inventory well up to technical logistics. If it is not managed properly, it can cause many problems and start disrupting your daily business operations and services

Here are some ways to manage your inventory that can be applied to your business:

1. The main problem of recording inventory

In general, a company always wants to manage its stock inventory well to reduce the risk of loss of goods, damage and also prediction errors. To effectively manage inventory, it requires a structured way and also uses applications that can help manage it easily.

However, as is well known, managing inventory stock is arguably quite difficult. Many things need to be done right, such as: calculating balances, determining the cost of goods, making stock orders and so on. To find out more, here are some of the main problems in recording the stock of goods that often occur:

• Lack of planning and projections for inventory control

• Lack of understanding of the inventory system and cost price methods

• HR Quality

• Absence of a control system

• Do not use the stock application

2. Understand the basic concepts of recording inventory

Inventory recording activity is a very important thing done by every business. It aims to maintain the availability of goods for consumers. It was also important to facilitate the calculation of capital and company profits. There are two ways to record inventory, namely:

• Recording Inventory with Physical Methods

This inventory recording method is also commonly referred to as the periodic system because everything is counted at the end of the period with physical count. Calculation at the warehouse where the goods are stored is carried out to determine the amount of merchandise left.

• Recording Inventory by Perpetual Method

This method is a method of recording inventory which is done all the time, as long as the flow of merchandise keeps running. In the perpetual method, the value or cost of goods sold and the amount of merchandise inventory at the end of the accounting period can be known at any time by the businessman. The method of recording merchandise inventory is carried out on an ongoing basis, involving changes in inventory which are reflected in inventory accounts. The purchase and sale or release of an item can be recorded directly in the inventory account at the time of a transaction.

3. Effective recording solutions

After knowing some of the main problems and also the basic concepts of recording inventory, it’s time for you to find out some solutions that you can apply to solve those problems. To overcome this, the warehouse management system not just obliged to discusses the amount of inventory with the distributor, but they must ensure that the products stored in that place can be accepted by your customers in a perfect state.