Why Inventories Are Must for Every Business Organization
The functions of business organizations are interlinked with each other, often they would even overlap. The backbone of every industry is aspects like logistics, inventories and supply management. Inventories are made at specified periods by organizations to get an account of their merchandise, raw materials, finished and unfinished products. Unsold products are known as liquid assets which can be sold and converted into cash. Inventories are important to marketing people and finance controllers. Most organizations have a separate department for managing inventories. The inventory planners in this department constantly monitor, control and review inventory. Apart from inventories made of finished goods stored in warehouses and distribution centers, raw materials and finished goods that are in transit also form part of the inventory. Inventories of finished products are conducted by the organization at their various stocking points with their stockiest and dealers.
All business establishments set aside certain days in a year to visit their warehouses and take stock of their goods, supplies, raw materials and more. They make records of every single item. If differences are found, they are investigated and adjustments will be made. Such procedures are called physical inventories. They are difficult and not a very pleasant experience, but they are a necessity. The reason why physical inventories are conducted is to check if the inventory accounting records are accurate. Every item in the warehouse is recorded and these items should be found in the accounting records. Businesses are considered to be successful and profitable when the inventory accounting records show accuracy. Another great advantage of inventory stock accounting is that if you are low on stock you can make efforts to restock on the under-stocked items. In this way customer relations will be good. Physical inventories are time consuming and expensive Physical inventories are done in phases; plans are drawn up, preparation, analysis of the results and execution are made.
Generally an organization will hire an inventory service to make inventories of all their stock, such as raw material, finished and unfinished products and more. These service providers are highly accurate and thorough in every detail. They plan and prepare the physical inventory, administer the process from start to finish, update systems to accurately reflect the value, explain the best practice of inventory management and reconcile the inventory with the general ledger. Check the internet for highly professional inventory services that will provide you with an accurate account of your business. Though such services are considered expensive, they are worth every dollar you pay them.
For more information about Inventories and inventory service you may visit: http://www.totalinteractiveservices.com/
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