Inventory is a well-known concept, but are you sure you know what it is, why it is so important, and what types ofinventory are there? We explain everything in the article. Check it out!
What exactly is an inventory? Definition of the concept
Inventory is a process that aims to count and determine the value of all assets and liabilities of a company. Inventory is mainly performed to determine the exact value of a company’s assets, as well as to determine the amount of taxes. Inventory is also important for accounting and auditing purposes.
Why is inventory important?
Inventory is important because it identifies a company’s inventory of goods and services. Inventory is also important for tax and financial purposes. Inventory records serve as proof of purchases and quantities of products in stock. Inventories are often taken before and after the sales season or during major changes in assortment.
Inventory – how to do it right?
Taking inventory is part of the process of running a company. It can be said that inventory is nothing more than “counting” all the products that are in stock. This allows you to determine how many products are available for sale, as well as their types and models. Inventory is carried out to determine how many products are available for sale in the store, as well as their types and models. The inventory is carried out to determine what products are available for sale in the store, as well as their types and models. It is important to remember that inventory is not just counting products. It is also an assessment of the condition of the products and their value. The inventory is carried out to determine what products are available in the store, as well as their types and models. For an inventory to be effective, it must be well prepared. Therefore, it is worth knowing what are the stages of inventory preparation and what are the most important factors to pay attention to.
The stages of inventory preparation are:
- Inventoryplanning – this is the first stage of inventory preparation. In this stage it is necessary to determine when the inventory is to take place, what products will be counted and who will perform the inventory.
- Preparing the warehouse for the inventory – this is the next stage of inventory preparation. In this stage, the warehouse should be organized so that the inventory will be effective.
- Selecting the inventory method – in this stage, you should choose the inventory method that will be most effective.
- Taking inventory – this is the final stage of inventory preparation. In this stage, the inventory should be carried out according to the selected method.
- Evaluating the results of the inventory – in this stage you should evaluate whether the inventory was effective.
- Analysis of inventory results – here you should analyze the results of the inventory.
- Summary of the inventory – at this stage the inventory should be summarized.
Types of inventories
Inventory is nothing more than an accurate inventory and valuation of all assets and liabilities that a company has. It is carried out when the owner wants to know what the value of the company’s assets is. We can distinguish several types of inventory:
- fixed asset inventory – is mandatory for every enterprise. It involves a thorough inventory of all fixed assets that the company owns. Fixed assets are nothing more than, for example, machinery, furniture, equipment. The value of fixed assets is important from the point of view of taxation.
- Inventory of materials and goods – is carried out when the company wants to know what materials and goods it has and their value. This is especially important for companies that maintain warehouses.
- Inventoryof documents – is carried out when the company wants to know what documents it has in its possession and what their values are. Documents are, for example, invoices, contracts, accounting documents. Document inventory is especially important for companies that keep a large number of documents.
