Wanted to know! about inventory, I believe you know well what inventory is? But there are few implications that tells the way you disclose your business inventory status, cost your inventory and build pricing policies for your products, there are few things that we are going to cover in this series of articles and they are all about inventories, their costing methods, and the effects of different costing methods for different businesses, costing techniques that are suitable for different businesses, bills of materials, types of inventories, and the most important
How to manage items or products or meanwhile inventory of your business, the word inventory used mostly in USA conventions when you are reading American based business mags or news, when you move towards EU the word turns into “Stock” other names are goods for resales, goods, merchandise, items, products and maybe there are more other words are also used but I don’t know to be frank.
Well, moving on into this I will incorporate the inventory in Small and Medium sized businesses, pricing and costing strategies determined whether you are costing your inventory in your balance sheet good or not and whether you are obtaining the good price from your customers or not how to estimate inventory levels and what is an EOQ (economic Order Quantity) and how to use that in your business, well inventory itself a complete and a complex subject of business world and that’s why need a complete and deep eye to look around and decide.
The major part of these articles will be incorporation of Inventory with your QuickBooks Online or QuickBooks POS and their different packages and versions, from past decade or even more.
QuickBooks has been one of the essential element of the Small and Medium Sized businesses and it becomes an industry so I must specify that these articles will tell you how to manage inventory in QuickBooks and out of the complex world of inventory the things that a small business owner need to look on as there are lot of things that a small business should not waste time on.
I have been serving SMEs from the better part of the decade, the most businesses are related with western Hemisphere mostly are from USA and other are from UK, CA, Australia and NZ, although the businesses I served and serving right now most of them are related to Real Estate and E-Commerce industry but there are also many of them are from Hospitality and Management and consultation businesses,.
As we are going to discuss things about inventory so I must say that I will talk about the businesses who maintain, keep and sell items or products. Out of all there could be two types of Accounting system a business could adopt one is Product Accounting and one is Period or Periodic Accounting.
Product Accounting and Periodic Accounting
Product Accounting is an accounting technique used mainly internally for decision making process while Periodic Accounting in which the business shows a complete status of his operations and economic benefits and outflows that a business incurred during that specific period.
In small business world these accounts are usually made annually at the end of the period and the parties or the stakeholders are only interested in one figure which is “Profit”, by looking into this figure entrepreneur calculate his tax liability and compare figures of previous year to the current year figures and make decision and determine the overall strategy of the business, they mostly seeks helps from professionals like CPAs and Chartered Accountants to determine the overall operational health of their business and whether they are making progress or there need more effort to take the business to the next level.