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Topic: inventory cost

5 Causes of Inventory Waste That’s Costing Your Business and How to Avoid Them

Inventory waste can cost your business valuable time and resources. Inventory ties up capital and if you’re not managing it effectively it will quickly absorb important cash flow and worse, it can hide inefficiencies within your operations. It is crucial to optimise inventory control to help reduce your inventory waste. However, before you can re ... Read More

  December 16, 2019     

Aged Inventory Reports: What are they and how do they impact inventory control?

Aged inventory generally refers to inventory stock that has been held for longer than six months usually due to low consumption or slow sales. Aged inventory is not an overnight occurrence however, any surplus of inventory stock is both costing you money and restricting your cashflow. Aged inventory reports Aged inventory reports are documents that ... Read More

  October 30, 2019     

Is Your Inventory Management Helping Your Bottom Line?

Do you know where your wallet is right now? Sure, every so often you misplace your wallet. It might end up in the pocket of a pair of jeans on the floor, but it’s safe to say that 99% of the time you know where it is. This is because wallets are our important personal […] ... Read More

  March 22, 2019     

Thrifty Inventory Management to Save Money and Increase Profits

In today’s manufacturing arena, the common mantra is to produce more ‘faster, quicker, cheaper’ with the common goal being to instigate more interest through marketing, drive sales up and increase profits. This is all very well, however to achieve this goal, inventory management needs to be a focus. If inventory management is not considered c ... Read More

  March 8, 2019     

Inventory Accounting: When Should You Use the Weighted Average Cost?

Accounting cost methods are used to control how a businesses inventory expenses appear on the company books. The weighted average is an accounting cost method used to value a company’s inventory by applying the average cost of on-hand inventory to each item of inventory stock. This means that both the cost of goods sold (COGS) […] ... Read More

  February 6, 2019     

Improve Your Financial Health with Better Inventory Control

There is a positive correlation between the quality of a company’s inventory control and its financial performance. Many financial ratios incorporate inventory values to measure aspects of a business’ financial health. For example: Inventory turnover ratio helps a business to plan and to more accurately forecast the cash necessary to reinvest i ... Read More

  February 5, 2019     

The Weighted Average Cost Method: When should you use it?

Inventory management is a key factor in the success of every business: from ordering inventory to counting stock accurately, understanding your business’ inventory is essential. In this article, we look at one way you can do this, namely, the weighted average cost method. This method is commonly adopted by manufacturers and other companies wh ... Read More

  January 4, 2019     

The Weighted Average Cost Method of Inventory Valuation

The weighted average cost method in accounting is one of three approaches of valuing your businesses inventory stock and determines the average cost of all inventory items based on the individual costs and the quantity of each item held in stock. Businesses use the weighted average to determine the amount that goes into the inventory […] ... Read More

  December 17, 2018     

Uncovering the Implications Behind the Weighted Average Cost Method

The weighted average cost method helps determine inventory valuation based on an average price per unit. The inventory is calculated by taking the average cost of all like-goods. The average cost is determined by dividing the cost of goods sold in the inventory stock, by the total number of goods that are on the market […] ... Read More

  December 11, 2018     

How Does the Weighted Average Method Work?

There are a variety of ways to measure the value of your inventory. If you’re a business owner, you might look at different tactics to see what work best for you. This may include the last-in-first-out method, the first-in-first-out method or the weighted average method. Unleashed Software uses the weighted cost method. There are pluses [… ... Read More

  December 11, 2018     

Inventory Shrinkage: A Ballooning Problem Without Inventory Management

When the physical count and value of stock does not reconcile to the reported value from the accounting system, inventory shrinkage happens. Essentially, there is a loss of stock and subsequent value that must be investigated and reconciled. Inventory shrinkage is quite a problem in and of itself, but also over time if not resolved, […] ... Read More

  October 6, 2018     

3 Ways to Combat Inventory Shrinkage

Inventory shrinkage creates problems for businesses as it leads to a loss of sales and profits. A 2016 National Security Survey found that inventory shrinkage costs businesses $45.2 billion in 2015. In this article, we explain what inventory shrinkage may mean for your business and provide some useful tips for avoiding it. What causes inventory [&h ... Read More

  September 28, 2018     

3 Causes of Dead Stock Inventory That’s Costing Your Business

What is dead stock? Dead stock inventory are items in your business that has not been or cannot be sold – inventory that has never been worn, used, or sold and has been on shelves for an extended period of time. Businesses that do not use good inventory management systems can end up having dead […] ... Read More

  September 17, 2018     

4 Ways to Rid Your Inventory of Dead Stock

Dead stock is the inventory stock that sits forgotten in the back shelves and far recesses of your warehouse. It is not likely to ever move from where it rests and slowly drains valuable resources. Every bit of warehouse space dedicated to dead stock is a lost opportunity, as you can’t keep more quantities of […] ... Read More

  September 11, 2018     

How Can You Optimise Your Supply Chain?

Optimising the supply chain for efficiency can result in a reduction of costs by as much as 10 to 40%. But how do you go about creating an efficient supply chain? In this article we look at some actions to implement to build an efficient supply chain for your business. Automate your purchasing activities Small […] ... Read More

  August 14, 2018     

5 Types of Inventory Waste That Are Costing You Money

The types of inventory waste found in a business are not solely limited to damaged or outdated stock. Waste can be encountered in any activity that uses resources without adding any value for the end user. Instead, it increases cost, either to the manufacturer or to the consumer. Waste is a key area where businesses […] ... Read More

  August 11, 2018     

Unravelling the Costs of FBA

In a previous article, we discussed what Fulfilment by Amazon was, and the benefits it can bring to businesses. FBA can be a useful tool for many sellers but the fees can sting. It is useful to see if FBA provides a good return on investment or if it is just driving up the overall […] ... Read More

  July 24, 2018     

Accounting Basics for Your Inventory Stock

Inventory management is the precise control of a business’ inventory incorporating raw material, WIPs (works-in-progress) and completed goods. The reason why inventory must be managed accurately is that it costs money to acquire or make and therefore if not controlled properly, it can represent a huge money drain to the company. Therefore, a larg ... Read More

  January 8, 2018     

ABC Analysis: Focusing on the Critical Few

In most stock-based businesses, the Pareto Principle, often known as the 80-20 rule, holds true for most aspects of inventory management. Roughly 80% of the value of a business’ inventory is usually tied up in about 20% of its product lines. This implies that managing the top 20% of a business’ inventory is critically important. […] ... Read More

  December 15, 2017     

Dealing with Seasonality: A Guide for Food Manufacturers

At first blush, many food manufacturers’ business plans seem straightforward. Food manufacturers choose a mix of innovative food products, optimise costs and plan to sell as many units as possible. Unfortunately, the market for processed food is highly dynamic, so food producers are unlikely to produce consistent volumes of food products in fixed ... Read More

  December 7, 2017     

To Consign or Not To Consign?

Unless you’re in the transportation business, you usually own the inventory in your possession. Not so when you hold consignment inventory. Inventory that is on consignment refers to stock that a business has in its possession, but which it does not legally own. When a business holds stock on consignment, the supplier (and owner) of […] ... Read More

  December 1, 2017     

Seasonality and Business Cycles

Seasonality refers to recurring fluctuations that happen at regular and predictable periods every calendar year. Business cycles on the other hand can be anything but regular. Business cycles are the natural rise and fall of a company’s economic growth over time, characterised by the four stages of expansion, peak, contraction and trough. Expansi ... Read More

  October 21, 2017