You probably did not have a formal way of handling business when you first began.However, as the company grew you knew that you could no longer walk around with business information in your head.If you want to grow on into the future, then you have to move on to the next level.If you want to have a successful company that continues to grow on a yearly basis, then you must set these things in place.
You will have to decide upon a good inventory system.Will you settle upon perpetual or periodic?Of course there are major advantages and disadvantages for each system.The way that the two systems are updated really set them apart.The perpetual inventory system updates information consistently.Whereas the periodic inventory system only updates information once a physical count has been done.But, this article will talk about the periodic inventory system.
Periodic inventory is only updated after a certain amount of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.This means that in terms of the books, the information is not regularly updated.The records do not change, even when the product is shipped or received.Although this is a definite con of using a periodic system, it is something that many first time business owners are willing to endure.
With the periodic system, you don't have to purchase a pricey inventory management software package.This is because information is not updated when product is ordered, received or shipped.Yes, sales are being made, but your inventory system is not updated until the next physical inventory count.This could be a week, months or even a year before your records are updated to reflect the correct inventory amount.
A small company might find this beneficial.But, if you have been in business for a while, then this system might not be for your company.You will need a full fledge system that is capable of keeping track of your inventory in real time.
Quite naturally the biggest benefit is that you won't have expensive upfront costs for an inventory management software system. You might be able to get away with using only an excel spreadsheet.You will not be required to feed information into a database.
But, there are also cons.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.The system is only updated the time of inventory.If the company has a lot of activitiy, this can be irritating.
Simply put, it is good to have an inventory system.But, you have to pick which one.
You will have to decide upon a good inventory system.Will you settle upon perpetual or periodic?Of course there are major advantages and disadvantages for each system.The way that the two systems are updated really set them apart.The perpetual inventory system updates information consistently.Whereas the periodic inventory system only updates information once a physical count has been done.But, this article will talk about the periodic inventory system.
Periodic inventory is only updated after a certain amount of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.This means that in terms of the books, the information is not regularly updated.The records do not change, even when the product is shipped or received.Although this is a definite con of using a periodic system, it is something that many first time business owners are willing to endure.
With the periodic system, you don't have to purchase a pricey inventory management software package.This is because information is not updated when product is ordered, received or shipped.Yes, sales are being made, but your inventory system is not updated until the next physical inventory count.This could be a week, months or even a year before your records are updated to reflect the correct inventory amount.
A small company might find this beneficial.But, if you have been in business for a while, then this system might not be for your company.You will need a full fledge system that is capable of keeping track of your inventory in real time.
Quite naturally the biggest benefit is that you won't have expensive upfront costs for an inventory management software system. You might be able to get away with using only an excel spreadsheet.You will not be required to feed information into a database.
But, there are also cons.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.The system is only updated the time of inventory.If the company has a lot of activitiy, this can be irritating.
Simply put, it is good to have an inventory system.But, you have to pick which one.
