You probably did not have a formal way of handling business when you first began. However, as time passed by and the company continued to grow, you realized that you could no longer run your company in an efficient manner by just scribbling down notes on a sheet of paper or by keeping valuable information in your head.If you want to continue growing your business, now is the time to take your business 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.
The periodic system is only updated per a specific interval of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.Info is not updated on the books.The records are not reflected when product is delivered, shipped or received.This may be one of the bad things, but there are plenty of owners that are fine with this logic.
With the periodic system, you don't have to purchase a pricey inventory management software package.Info is not updated, so there is no use for it.Sales are being made, but you will not do an update until the next physical count.This might not happen until a year from now.
A smaller company might like this.But, if you have been in business for a while, then this system might not be for your company.You will need a full fledge system that is capable of keeping track of your inventory in real time.
The best benefit is that you will not dish out up front money on an inventory management software system. You could just use an excel spreadsheet.No, you will not have to consistently key information into the system, but this might become a hassle in the end.
However, there are flaws to this system.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.You will just update the system after a physical count.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.
The periodic system is only updated per a specific interval of time.Normally, this is around inventory time.Companies manually count their inventory on a weekly, monthly, bi-yearly or even yearly basis.Info is not updated on the books.The records are not reflected when product is delivered, shipped or received.This may be one of the bad things, but there are plenty of owners that are fine with this logic.
With the periodic system, you don't have to purchase a pricey inventory management software package.Info is not updated, so there is no use for it.Sales are being made, but you will not do an update until the next physical count.This might not happen until a year from now.
A smaller company might like this.But, if you have been in business for a while, then this system might not be for your company.You will need a full fledge system that is capable of keeping track of your inventory in real time.
The best benefit is that you will not dish out up front money on an inventory management software system. You could just use an excel spreadsheet.No, you will not have to consistently key information into the system, but this might become a hassle in the end.
However, there are flaws to this system.The main one is that you will never have an accurate inventory count.It will be hard to track inventory when sales are made.You will just update the system after a physical count.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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