You probably did not have a formal way of handling business when you first began.But as the company expanded, you realized that you could not leave company data stuck in your head.If you want to grow on into the future, then you have to move on to the next level.You must create a formal system.
Not only must you incorporate an inventory system into your everyday business operations, but you must decide upon the type of inventory system.Do you want periodic or perpetual?Of course there are major advantages and disadvantages for each system.The only difference between the two systems is the way that the inventory is updated.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.
The periodic system is only updated per a specific interval of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.Info is not updated on the books.The records are not reflected when product is delivered, shipped or received.This may be one of the bad things, but there are plenty of owners that are fine with this logic.
The periodic inventory system will not require a purchase of a costly inventory management software package in order to conduct business.Info is not updated on a regular basis, so it would probably go to waste.Sales are made and orders are placed, but your records will not reflect this until the inventory count.This might not happen until a year from now.
A smaller company might like this.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.
One of the best things is that you will not have to spend money on an inventory management software system in the very beginning. You could just use an excel spreadsheet.You don't have to keep feeding info to a system.
However, there are also disadvantages to having this kind of inventory.First, the inventory is never accurate.Tracking inventory is hard.The system is only updated the time of inventory.This can become very stressful if you have a large company that has a lot of business transactions.
Simply put, it is good to have an inventory system.But, you have to pick which one.
Not only must you incorporate an inventory system into your everyday business operations, but you must decide upon the type of inventory system.Do you want periodic or perpetual?Of course there are major advantages and disadvantages for each system.The only difference between the two systems is the way that the inventory is updated.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.
The periodic system is only updated per a specific interval of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.Info is not updated on the books.The records are not reflected when product is delivered, shipped or received.This may be one of the bad things, but there are plenty of owners that are fine with this logic.
The periodic inventory system will not require a purchase of a costly inventory management software package in order to conduct business.Info is not updated on a regular basis, so it would probably go to waste.Sales are made and orders are placed, but your records will not reflect this until the inventory count.This might not happen until a year from now.
A smaller company might like this.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.
One of the best things is that you will not have to spend money on an inventory management software system in the very beginning. You could just use an excel spreadsheet.You don't have to keep feeding info to a system.
However, there are also disadvantages to having this kind of inventory.First, the inventory is never accurate.Tracking inventory is hard.The system is only updated the time of inventory.This can become very stressful if you have a large company that has a lot of business transactions.
Simply put, it is good to have an inventory system.But, you have to pick which one.
