Inventory comprises a big percentage in the generated revenue and in the incurred costs of the business entity. Recording of inventory is essential for business entities especially those involved in inventory financing. Inventory must be efficiently monitored for the business entity to gain increase in revenue to cover such financing loan.
Thus, proper management of inventory is necessary not only as a means to properly estimate retail inventory, materials inventory, or office inventory needed by the entity but also as an accurate basis of financial reports needed by the stakeholders of the business entity. The following templates provide the necessary formats in the recording of different types of inventory.
Asset Inventory Templates
Damage Inventory Report
What Is an Inventory?
An inventory pertains to the assets of a business entity that aid employees in achieving the goals of the entity which is to generate revenue. The nature of inventory differs between business entities due to the fact that an inventory is associated with the type of industry the business entity is categorized.
Managing inventory is done using either the manual type or the database type of management as shown on the sample inventory database templates on this website.
Kinds of Inventory
The following are the different types of inventory included in the Assets section of a business entity’s financial reports:
- Product Inventory – This type of inventory comprises processed products in the company’s stock that are ready for distribution to distributor partners in charge of the sale of these products. As depicted on the product inventory templates on this website, manufacturing industries usually incorporate this type of inventory which is further divided into the following:
- Raw Materials – These items are needed to produce final company products.
- Work-in-Process – Goods in the process of completion are under this category.
- Finished Goods – These products are completed and available for sale.
- Office Inventory – This pertains to the supplies and the equipment used by employees in generating the information needed in company reporting. In financial reports to stakeholders, this inventory is accounted for as administrative expenses.
- Retail Inventory – This category includes the products for resale of the company. Businesses in the merchandising industry monitor this kind of inventory.
Personal Property Home
A Guide to Proper Inventory Handling
Inventory management is an essential part in the operations of the business entity. As manifested on the sample tenancy inventory templates, here are the guidelines in the proper handling of inventory:
- Establish a inventory stocking plan. Having laid out stock plans and policies that serve as the standard for stocking inventory will aid greatly in managing inventory. A low stock level must be set as an indication for reorder. There will be less issues on inventory costs that are due to overage or shortage of inventory when average and safety stock inventory levels are predetermined.
- Assign persons to handle inventory control. For the inventory stock to be monitored accurately, inventory control personnel must be assigned solely for the management of the various inventory stock of the business entity. Set different inventory personnel for the different inventories being managed.
- Invest in real-time inventory management. To have less difficulty in the recording of inventory for financial and management reports, make use of software for inventory management. Inventory management software might be costly but to use these software will have a big contribution to the accurate management and recording of inventory due to its real-time feature.
- Be consistent in implementing inventory systems. A company has policies with regards to what inventory system to adopt. The most widely used inventory system is the perpetual inventory system which is designed to keep track of the inventory quantity and its corresponding value. Implement one inventory system for all the owned inventory.
- Be wise in managing slow-moving and obsolete inventory. With the use of the ABC classification, you would know the items that need attention. Obsolete and slow-moving items take too much space in the warehouse. Thus, devise ways to acquire gains than losses from these items and optimize inventory space.
Data Center Inventory
Data Inventory Worksheet
Reasons for Having Inventory
The following are the reasons why business entities acquire inventories:
- Lesser Purchase Costs – Businesses obtain lower order costs if they buy items in larger quantities. Some suppliers even offer discounts and rebates to their loyal consumers for bulk orders. In this regard, incurring less purchase costs will give the entity the opportunity to achieve increase on the generated income.
- Unpredictable Market Demand and Supply – Economic conditions play a big factor when it comes to inventory. Fluctuations on the supply and the demand of certain products form bases of business entity’s inventories.
- Maintain Product Price – Inflation can affect greatly on the price of products. Thus, buying inventory when the timing is right help the business entity avoid the impact of cost inflation.
Tips to Accurate Recording of Inventory
Inventory is reported with the use of an inventory report template filled up with relevant inventory data from recording inventory. Here are tips to achieve an effective and an accurate record of inventory:
- Classify inventory stock. It is much easier to record inventory transfers when it is arranged in an efficient manner following the ABC classification system.
- Update inventory log. Do not fail to record the transfer of inventory that transpired within a given period. Conduct a periodic actual inventory count on items. Use inventory templates prepared on the web as a tool to aid you recording inventory transfer and actual count. Take for example the content inventory template which is used to monitor contents on a website.
Benefits of Proper Inventory Management
The following are the benefits acquired by business entities in managing inventory properly:
- Lesser Costs Incurred – Because of inventory management strategies, entities incur lower costs when it comes to inventory of write off items.
- Increase in Revenue – The result of incurring lesser costs is reflected on the sales increase in the books of the business entity.
- Transparency in Information – Proper monitoring and recording of inventory entails knowledge on the inventory processes as reflected on inventory reports generated with the aid of an inventory worksheet template.
- Efficiency in Inventory Operations – From the stocking of inventory to the selling of the inventory, transfers of inventory is done with ease as a result of the optimization of inventory, a factor in inventory management.
- Improved Service to Customers – Because of managing inventory, delivery of products to customers can be done without the hassle of shortage of stocks gaining loyalty from customers.
Management of inventory is vital for businesses in relevant industries because obtaining efficiency in handling inventory entails increase in the business entity’s overall performance. With the use of these downloadable inventory templates, you can generate the needed financial reporting information from monitoring inventory transfers and inventory in stock precisely and easily.