You must keep complete and proper inventory records for enhanced inventory management. Keeping your inventory data up to date not only helps you manage better but also increases your profits.
As inventory is a critical aspect of a business’s balance sheets, you will need to curate and provide accurate inventory data at the end of every fiscal year for accountability.
Top Reasons Why You Should Pay Attention To Your Inventory Records
Inventory records are critical for businesses, particularly when it comes to calculating profit margins and returns.
You need to have a complete list of inventory records to make sure that you are managing your business properly. Inventory records also help you with negotiations with suppliers because they can provide information on what they need and how much of it they want.
A complete inventory record is also a key part of any financial statement or balance sheet, so if the business is publicly traded, then these records are essential for an accurate performance report.
#1 Ensures stock following is exact
Reliably monitoring what’s leaving and entering the distribution center guarantees stock exactness and stock compromise.
Mistaken stock checks can prompt stock shrinkage, or when stock is not exactly the recorded equilibrium in the bookkeeping record, and it can cause significant disparities that can lose net revenues and other financials.
#2 Makes stock bookkeeping simpler
Monitoring stock worth and check is legitimately expected of all retailers and producers, according to the Financial Accounting Standards Board (FASB) and controlled by Generally Accepted Accounting Principles (GAAP).
By keeping a legitimate stock record-keeping measure, you’re likewise ready to follow changes in esteem, so you realize how much your stock is worth toward the finish of a bookkeeping period.
#3 Helps keep things from leaving the stock
Staying up with the latest stock records assists you with forestalling stockouts and having a superior comprehension of when it’s an ideal opportunity to reorder more stock.
Top Tips For Maintaining Accuracy In Your Inventory Records
Contingent upon the quantity of SKUs you sell, your request volume, and the size of your organization, the intricacy of stock record-keeping fluctuates.
Regardless of how multifaceted your business is, here are a portion of the top stock administration techniques you can execute.
#1 Keep actual reinforcements
A stock review is characterized as the most common way of checking an organization’s real stock levels against their monetary records to guarantee exact stock bookkeeping. To make stock examining more productive, it is useful for retailers to keep actual records of all stock alongside online reinforcements (or the other way around).
Keeping unique actual duplicates can be a lawful prerequisite in certain states. Furthermore, it likewise gets your data in the event of a circumstance where your cloud worker’s honesty is compromised.
#2 Get input from your bookkeeper on what to record and how
Discover a bookkeeper you can trust and get their bits of knowledge into how to keep stock records for your business.
As a rule, the data you need during the bookkeeping time frame incorporates COGS, crude materials (if relevant), starting stock, and the benefit of finishing stock (what’s leftover toward the finish of a bookkeeping period).
You can likewise ask your bookkeeper for their recommendation on the best way to pick the best stock valuation technique depending on the kind of items you sell and the volume of your run-of-the-mill deals.
#3 Remain reliable in your bookkeeping strategies
There are numerous approaches to track and record stock. Regardless of the strategy you pick, the main thing is to remain steady to guarantee exactness.
Toward the finish of a bookkeeping period or monetary year, you should ascertain how much your stock is worth.
The most widely recognized valuation techniques in online business include:
- FIFO (earliest in, earliest out)
- LIFO (toward the end in, first-out)
- Stock weighted normal (WAC)
In Conclusion: Invest in inventory management software
Update records after a designated accounting period (periodic inventory system). Continuously update the records with every transaction (perpetual inventory system). As your business grows, adapting a perpetual inventory system is your best bet.
This can be done by investing in inventory management software, which will help you track inventory flow in real-time and record live updates without you lifting a finger.