You probably did not have a formal way of handling business when you first began.But as the company expanded, you realized that you could not leave company data stuck in your head.If you want to grow on into the future, then you have to move on to the next level.You must create a formal system.
Not only must you incorporate an inventory system into your everyday business operations, but you must decide upon the type of inventory system.Do you want periodic or perpetual?Of course there are major advantages and disadvantages for each system.The only difference between the two systems is the way that the inventory is updated.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.
Periodic inventory is only updated after a certain amount of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.This means that in terms of the books, the information is not regularly updated.The records do not change, even when the product is 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.Sales are made and orders are placed, but your records will not reflect this until the inventory count.This might not happen until a year from now.
A smaller company might like this.But for a company that is active, this might not work.You need a system that is constantly updated.
Quite naturally the biggest benefit is that you won't have expensive upfront costs for an inventory management software system. You might be able to get away with using only an excel spreadsheet.You will not be required to feed information into a database.
But, there are also cons.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.The system is only updated the time of inventory.If the company has a lot of activitiy, this can be irritating.
Simply put, it is good to have an inventory system.But, you have to pick which one.
Not only must you incorporate an inventory system into your everyday business operations, but you must decide upon the type of inventory system.Do you want periodic or perpetual?Of course there are major advantages and disadvantages for each system.The only difference between the two systems is the way that the inventory is updated.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.
Periodic inventory is only updated after a certain amount of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.This means that in terms of the books, the information is not regularly updated.The records do not change, even when the product is 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.Sales are made and orders are placed, but your records will not reflect this until the inventory count.This might not happen until a year from now.
A smaller company might like this.But for a company that is active, this might not work.You need a system that is constantly updated.
Quite naturally the biggest benefit is that you won't have expensive upfront costs for an inventory management software system. You might be able to get away with using only an excel spreadsheet.You will not be required to feed information into a database.
But, there are also cons.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.The system is only updated the time of inventory.If the company has a lot of activitiy, this can be irritating.
Simply put, it is good to have an inventory system.But, you have to pick which one.
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