Inventory Maintenance

Inventory Maintenance

tick_mark20   Registered BAS Agents – Registration No. 80294000

tick_mark20   Registered ASIC Agents – Registration No. 37258

tick_mark20   ABBS are Certified Practising Bookkeepers

Inventory / Stock Management

Inventory management in a business is a very important function in that it affects cash flow and is exposed to risks of obsolescence and age.  Because of this fact, stock levels and stock turnover should be monitored carefully, and there are a number of methods available to business owners do this.   The two principal management methods are perpetual inventory management and periodic inventory management systems.

Periodic Inventory

Periodic inventory is used by many business owners because it is the least expensive method to use, however, it does not provide an up-to-date and exacting view of what is happening in terms of individual stock items or overall stock valuation.  This method relies on stocktakes being completed accurately and ar regular intervals throughout the financial year, monthly, quarterly, bi-annually or annually.  The monthly or quarterly stocktake will provide the most up-to-date view of what is happening with inventory and management decisions made in terms of the risk factors quickly.  Bi-annual and annual stocktakes are though the most common because of the time-consuming nature of stocktakes.

The monthly or quarterly stocktake will provide the most up-to-date view of what is happening with inventory and management decisions made in terms of the risk factors quickly.  Bi-annual and annual stocktakes are though the most common because of the time-consuming nature of stocktakes with a far less informed view of the inventory situations, and therefore slower reaction times should things be going wrong.

Periodic inventory is dealt with in the Cost of Goods Sold section of the financials and calculated cased on opening inventory, purchases for the period and closing stock.  This must be done at the end of the financial year before the business accounts are handed off to the accountant for preparation of tax returns.

Perpetual Inventory

More information will be provided here soon

Contact Us or Have a Question

If you would like to keep track of inventory in your business, please contact us and someone will be in touch within 24 hours.

Should you wish to know more about ABBS, answers to questions we have been asked can be found on our Frequently Asked Questions page.

If you have a question that has not been answered there, please send it to us, and we will add it to the list for the benefit of others.

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