Inventory is an asset that is intended to be sold or consumed to product finished products in the ordinary course of business. Inventory may not be immediately ready for sales.
- Raw materials
- Work – in – Process
- Finished Goods
Inventory Management
Inventory management is the process of keeping the track of goods from manufacturing till it reaches point of sale and also it involves keeping track of new and returned from entering to exist.
Terms Used in Inventory Management
Stock item
Godown
SKU (Stock Keeping Units) – Parts Nos./ Codes
Safety Stock
Reorder Level
Price List – We can set standard rates also
Manufacture & Expiry Date
Dead Stock (Non using Items)
Inventor/ Stock valuation Methods
The choice of stock valuation methods depends on a number of variable, like the business situation and financial goals of the business organisation.
Cost of Goods sold = Opening Stock + Purchase (During the reporting period) – Closing stock
Different Types (Methods) of Inventory Valuation (Cost of Unsold Goods) :
At Zero Cost – No Commercial value goods
FIFO (First in First Out)
FIFO Perpetual (लगातार) (From When co. Started)
LIFO (Last in First Out)
LIFO Perpetual
HIFO (Highest in, First Out)
Monthly Average Cost
Last Purchase Cost – in Gold
Standard Cost – (Standard Rate > F12 > Standard Rate)
Inventory Management
- Inventory Masters (Units of Measure, Stock Groups, Stock Items)
- Batch Wise Details
- Price List & Levels
- Point of Sales (POS)
- Tracking of Item wise cost Details
- Order Processing
- Job Order Processing
- Stock Categories
- Costing Methods (LIFO, FIFO etc.)
- Bill of Materials
- Inventory Vouchers
- Inventory Reports
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