Control and stock Flashcards
What is Stock?
This is the goods/merchandise kept on the premises of a business or warehouse and available for sale or distribution
What is stock Control
this is the process of ensuring that appropriate amounts of stock are maintained by a business , so as to meet the customer’s demand without delay.
Principles of stock control?
- Accuracy- must give exact number of units in stock
- Security- stock must be kept in inventory system
- Location- must tell the exact location
- Demand- ensure amount you need is there
What is stock management?
an assessment and record of the amount of stock
the monitoring and control of goods and stock so that new stock can be ordered as required and the right numbers and quantities made available at all times
what is stock take?
an assessment and record of the amount of stock held by a business.
what’s the inventory?
A list of all goods in stock
Categories of stock inventory?
- Raw material
- Work in progress
- Finish Goods
- Consumable Goods
raw material
stock ready to use
work in progress
goods still in production
consumable goods
stock used in the daily running of business and will need updating
perpetual stock management
ELECTRONIC TRACKING SYSTEM
method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.
uses electronic tracking system to record inventory
periodic stock management
MANUEL TRACKING SYSTEM
The periodic inventory system is a method of inventory valuation for financial reporting purposes in which a physical count of the inventory is performed at specific intervals.
This accounting method takes inventory at the beginning of a period, adds new inventory purchases during the period and deducts ending inventory to derive the cost of goods sold (COGS).
difference between perpetual and periodic stock management?
the perpetual stock system assess the inventory by using an electronic tracking system to record the inventory and it updates everytime a good is bought or sold, while the periodic inventory system physically count the inventory and this is performed at specific intervals like the start of a period.
Types of P.O.S
Mobile POS Tablet POS Terminal POS ONLINE POS e-commerce Self Serve kiosk system
stock taking benefits
Explain 3 importance of stocktake
- it helps cut down on waste
- it shows how much of cash is tied up in stock
- It gives an idea of what to order and/or replace
Why conduct stock take?
Improved cash flow
Accurate profit margins
Identifies slow moving stock
Improve stock management
Steps to a successful stock take?
- identify cleary what stock is owned by business
- ensure the room is clean and organized
- have tools for stock take
- discourage distractions etc. phone
- count every item of inventory
- Check PHYSICAL count against ACCOUNTING records (ELECTRONIC)
- UPDATE your records
invoices
a list of goods sent or services provided, with a statement of the sum due for these; a bill.
purchase order p.o
A purchase order is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services
indent
is a purchase order often placed through an agent under specified conditions of sale
inventory management
is a systematic approach to sourcing,storing,and selling inventory both raw materials and finished goods
Discuss the importance of inventory management.
the management of the inventory enables the business to have a detail list of all the items on hand which in turn helps the business keep track of produce and items as to control the cash flow.
without it the business could suffer loss or theft
last in first out - L.I.F.O
First in first out - F.I.F.O
Last in, first out (LIFO) is a method used to account for inventory that records the most recently produced items as sold first. Under LIFO, the cost of the most recent products purchased (or produced) are the first to be expensed as cost of goods sold (COGS), which means the lower cost of older products will be reported as inventory.
Two alternative methods of inventory-costing include first in, first out (FIFO), where the oldest inventory items are recorded as sold first, and the average cost method, which takes the weighted average of all units available for sale during the accounting period and then uses that average cost to determine COGS and ending inventory.
profit margins
Profit margin gauges the degree to which a company or a business activity makes money,
