5 Reports to Manage Inventory Efficiently
Inventory is money sitting around in another form. You paid money for your inventory, and you will get that money back when you sell it. Until you sell them, managing inventory is crucial. Just like Cash flow, it can make or break your business.
Here are 5 Inventory reports you should be top of it to manage inventory efficiently.
1. Stock Movement Analysis
Movement analysis of inventory is very crucial for the efficient management of inventory. It provides you with much-needed insights about the flow of the stock in the businesses. With this report, you can get to know the fast-moving and slow-moving goods. Slow-moving goods will block the working capital. Thus, periodical check on stock movement will help you to optimize the working capital of the business.
2. Re-order level
Managing adequate stock is key for managing inventory successfully. Overstocking will lead to cash flow blockage and the additional cost for managing excess stock. On the other hand, understocking leads to loss of sale due to non-availability of stock at right time. As a result, it is important for a business to keep a close eye on the re-order level report to have the right product at the right place and the right time. This report helps the business in knowing the shortfall and quantities to be ordered considering the net stock available. Thus, it ensures that enough stocks are maintained to meet customer needs, at any point in time.
3. Ageing Analysis
Periodical tracking of ageing of stock Items is very crucial, especially if the durability of stock is short. The ageing analysis will help you keep track of the age of stock, as the older stock may depreciate or become obsolete, and result in a loss. Thus, it is important to periodically track the ageing of stock and accordingly plan to sell those before it becomes too late.
Ageing Analysis as a tool will be extremely helpful.
4. Stock-Wise Profitability
Item-wise Profitability helps the business in knowing the stock Items which yield high profit and low. The stock Item may yield low profit, but the outward movement is high. On the other hand, the profit margin will be high, but the product movement is slow. This report helps business in knowing the high profitable products and accordingly take business decisions.
5. Stock Summary
Stock Summary helps you to keep an eye on your closing stock. This report gives you visibility of the saleable and net stock available with you – considering stock-in-hand, delivery of supplies on the way, and sales orders of customers yet to be fulfilled. With this, you will always be able to take the right decision in terms of accepting the order. If the stock saleable stock is short, you can buy enough time to full fill the order or reject it. Thus, ensuring high levels of customer satisfaction.
In case the business has multiple locations, either as warehouse or business units, this will report will handy to know the closing stock at each location and accordingly take the decision. For example, if one location is low on inventory, you have the option of deciding whether to order stock from your suppliers or transferring inventory from a warehouse in proximity.
No Doubt! Managing inventory is one of the crucial aspects of the business. One of the key things in optimum inventory management is utilising the inventory reports. It provides the much-needed insights on the stock trends and gaps such that timely decisions can be taken. Using accounting software will help in providing on-time accurate and actionable information for decision making. Also, accounting software will help you automate the inventory management process and all the inventory reports will be available automatically which is crucial for forecasting stock movements and optimizing inventory level.
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