Inventory

Accounting for an Inventory System can be quite a complex issue.  The effect on a Business in the balance sheet can be quite significant, as can the outlay required to purchase the inventory to enable a business to complete a job.

While a business' balance sheet can appear quite healthy if there is a significant amount of stock on hand, this also means that there is a significant amount of cash that is unavailable for day to day business acitivity.  This means that until that stock is converted to cash - ie.. Sales, it is not capable of earning money for a business.  If there is money unnecessarily tied up in stock, it may be time to re-evaluate the level of stock that is required.  A business may benefit more from having the additional cash available, rather than additional stock, particularly if it is stock that is hard to sell.

There are many considerations that need to be taken into account with Inventory.

The Key Topics in this module are:

• The importance of having a good inventory management system
• How to determine the correct levels of stock to hold
• Pricing - the various methods of Inventory Accounting
• How your business can benefit from Obsolete / Old Stock
• How to minimise the expensive outlay's for Materials for a one off job
• Cost Analysis / Break Even Point

This Module is the fifth in the series of Money Matters for Small Business.  Each module is being released gradually over the period of December 2008 - January 2009. If you are interested in this module please complete the registrations of interest form, and as soon as the module is released you will be notified.