The Importance Of Stock Management

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Every business that has as object the commercialization of goods and services has the purpose of being able to manage its stock in the best way, hence the importance of stock management since, it   helps to analyze which products and/or services rotate better, which they give better margins in favor of the business among other variables. What helps to make better decisions in an area that, for the aforementioned companies, are the heart of the business.

Proper management of the stock allows your business to maximize profitability since through the revision of the rotations, you can make more accurate decisions as to which inventories you should continue to market and which ones do not remember that maintaining an inventory has a cost that in the long term can impact your business.

Code your stock

Being able to define well how you want to manage your stock is very important.

A good idea to create a data structure that allows you to better manage these inventories. It is creating alpha-numeric codes according to the type of inventory. In the same way, you could generate a better data structure from the deposits you have. This will also allow for a better and faster price update, in case it is required in addition to facilitating the analysis and correct interpretation at the time of obtaining reports.

Define the valuation method for your inventories

After having defined your data structure according to the items of stock and your deposits. It is important that you define the most appropriate valuation method for your inventory, some methods are:

  • PEPS (First to Enter First to Leave)
  • UEPS (Last to Enter First to Leave)
  • PPP (Weighted Average Price)

Do not forget to review well the business model that your company has regarding the handling of inventories. This will help establish which method best reflects the costs of your stock.

In many cases, the PPP option is usually the most used to pay.

How to manage the stock?

Management through deposits.

As we have already mentioned, being able to manage your stock through deposits, facilitates the management and decision making that may fall on the products you sell. Ideas of this are:

  • Create deposits based on geographic location.
  • From the type of inventory that you are going to market (this, depending on the business lines you manage).

In order to have better traceability of the behavior of your business, depending on the quantities of the deposits you can use referrals, so you will ensure a reliable physical inventory taking and so you can be certain of the stocks at the time of counting.

Online stock management

Having the data in real time facilitates decision making.

One of the major problems that usually occur when confirming a sale that requires the release of merchandise is the little certainty that you have on the balance of quantities that must be shipped, if you have the merchandise or if it is necessary to purchase more, he will play a very important role in order to fulfill the request.

This will ensure not only correct stock management but also help you avoid operating expenses that do not generate value to your business. That said, it is important that you can create a readable inventory structure and that it can be easily managed so that your business generates value.