The fast growing development in Indonesia has caused the increased number of new businesses, from small to large scale business. The main purpose of a business is to obtain the optimal profit and monitor the business development.One of the important elements should be taken by the company is to perform inventory assessment and its influence to company’s profit which its procedure keeps changing.
Stock inventory reporting is very crucial for the business. It is as the base of decision making and inventory is considered as one of the most active points in the business activity that are continually earned, processed, and sold. Therefore, the accounting system should be properly implemented to avoid the disruption within the company operation.
Besides, inventory record is also necessary to provide the information for the company. The error occurred in the inventory record will cause mistakes in determining the established company profit. The stored inventory period will influence the cost and cause the product damaged. This will lead to loss and the expired goods can not be sold in the market.
From the above explanation, it can be seen that managing stock inventory is very important for the business. Therefore, inventory must be properly managed to bring benefit to the company.
What is supplies? In general, it is known as the inventory to be sold or used. In any business, inventory management is required to make the business run smoothly. A company should recognize which one is good quality goods / materials, which items are best sellers or high market demand. Thus our inventory is precise and not excessive.
Inventory management is very important because it reduces risk due to late delivery, increased price, anticipates customer demand, and as commitment to customers.
Managing stock inventory is quite complicated task. If the amount of inventory is too large, it will cause the stuck funds because it is embedded in inventory, increased storage costs, and greater risk of goods damage. On the other hand, too little inventory leads to a stock out risk, since most goods could not be provided as needed with the required amount. This will make the production process stopped, sales delay, even loss of customers.
Surely, inventory should also focus to market demand. This is necessary to avoid excessive inventory on goods that are less desired by the customer. Ignoring the market needs, will make the inventory useless and make lots of loss.The risk of damaged goods or decreasing price lead to business loss.
Managing inventory properly generally requires high cost. Thus, a right inventory record method is needed to determine the inventory value that has not been sold and the cost of goods sold .
The main purpose of inventory management is to plan and control the inventory level in order to serve the needs or demand from time to time and minimize the total cost of the company.
