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.
The periodic inventory system is just changed when there is a new physical inventory.Usually this is done based upon the company's physical inventory count.Companies will perform inventory during the week, month or even year.This means that in terms of the books, the information is not regularly updated.The records are not reflected when product is delivered, 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.
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.Yes, sales are being made, but your inventory system is not updated until the next physical inventory count.This could be a month or even year later.
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 flaws to this system.First, the inventory is never accurate.It is hard to track sales.The system will not be updated until the next formal physical inventory count.This can become very stressful if you have a large company that has a lot of business transactions.
All in all, both inventory systems are adequate.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.
The periodic inventory system is just changed when there is a new physical inventory.Usually this is done based upon the company's physical inventory count.Companies will perform inventory during the week, month or even year.This means that in terms of the books, the information is not regularly updated.The records are not reflected when product is delivered, 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.
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.Yes, sales are being made, but your inventory system is not updated until the next physical inventory count.This could be a month or even year later.
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 flaws to this system.First, the inventory is never accurate.It is hard to track sales.The system will not be updated until the next formal physical inventory count.This can become very stressful if you have a large company that has a lot of business transactions.
All in all, both inventory systems are adequate.But, you have to pick which one.
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