Managing Inventory by Inventory

What is Inventory? According to Mulyadi (2010) in Accounting System, inventory is the purchased items for resale. For example, items purchased by retailers for resale or other land or property procurement for resale. Inventory covers finished goods products, in-progress, by entities and includes the material and equipment used in the production process.

Mulyadi states the Accounting System of inventory includes:

  1. Finished goods record
  2. Cost of goods sold record
  3. Received finished goods product/ sales return record
  4. Additional record and adjustment of cost of product inventory in process
  5. Cost of purchased inventory record
  6. Record of the cost of inventory returned to supplier
  7. Items request and outgoing items from warehouse
  8. Record of additional inventory cost due to returned warehouse item
  9. Physical inventory calculation system

It would be complicated for companies to make the above records, moreover for companies that produce huge items. To facilitate the operational manager in managing inventory and taking more responsive decision, some economic and information system experts create a computerized inventory recording, known as Inventory Software, which part of ERP.

According to Webopedia, Inventory Software is the software designed to assist businesses to control inventory, sales, purchasing, shipping, goods transfer among warehouses and other related inventory functions. The purpose of implementing Inventory Software is to support the mutation process record for each type of inventory stored in the warehouse, minimizing human error during input process, as well as facilitate the monitoring process by management to reduce the risk of lost goods and other. This system is closely related to the systems of sales, sales return, purchase, and purchase return.

The benefits of inventory software implementation are:

  • For the company
    1. Enable companies in monitoring the current inventory position
    2. Enable companies in generating reports or information for stakeholders
    3. Enable companies to reconcile/stock opname
    4. Managing vendors easily
    5. Minimize the costs incurred due to human error
    6. Managing balance
  • For the tax purposes:
    1. To control the company’s inventory
    2. Increase in reconciliation of customs documents with inventory system

Based on the above discussion, it can be concluded that a company requires a reliable Inventory Software. Inventory Software allows the owner to record properly and take decision quickly.