PJT Accountants

How to Manage One Of Your Largest Investments

12 June 08 PJT

Good Inventory or Stock Control may be defined as the activities and techniques required to maintain the desired level of inventory necessary to ensure that a certain level of sales may be maintained by a business.

Good Inventory Management means having enough but not too much.

Good Inventory Control requires a delicate balance is maintained between the amounts of materials you purchase or have available for sale and the amount you are able to sell, use or store effectively.

Always keep in mind that:

  • Having too much inventory equals extra expense for you as it can lead to shortfall in your Cash Flow and incur excess storage costs
  • Having too little inventory equals lost income in the form of lost sales, while also undermining the customer confidence in your ability to supply the products you claim to sell
  • Having the wrong inventory in stock means lost income in the form of lost sales, write downs and poor service.

On the other hand having the right inventory in stock and being able to sell it, can lead to:

  • Increased sales
  • New Customers
  • Increased customer confidence
  • The Cash Flow required for the new plant and equipment or for expansion
  • The ability to increase staff pay and benefits
  • New Investors

 

Does your business need assistance with managing stocks and inventory?. PJT can help, contact PJT on 07 5413 9300.

 

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