For most companies, the cost of sales is always the other key expenses, following the staff costs. Within the cost of sales, inventory is the core component that is reflected in the financial statements which can be appropriately handled by an experienced accounting firm in Johor Bahru (Also see Value Adding Services Provided by Accounting Firms).
Are you aware of the level of efficiency of the movement of inventories and do you know inside out on what your stock position at a particular point of time? Properly handling your stock is vital, given your revenue will not be generated if the required product is not available when your customers demand.
By keeping the stock at an optimum level, the company will be able to seize every sales opportunity as stock out is no longer an issue. At the same time, this practice will prevent having too much unpopular stock (Also see Accounting Tips For Rookie Entrepreneurs).
Pay Close Attention to Sales Pattern
By paying close attention to the sales pattern, you will better understand which of the stock are popular and which are holding the company from success. A reliable stock system gives you an overview of the sales activities to enable you to avoid falling into the trap of overstocking (Also see Typical Accounting Errors You Want To Avoid). This also indirectly reduces the threats of damages, burglary or becoming obsolete.
Additionally, a lower stock level also means lower impacts on a low season as the cash flow are not stuck on the shelf as stock. Hence, your business requires an experienced accounting firm in Johor Bahru make sure these are all well done. Check your sales pattern regularly so you can who when to stock up and when to slow down the purchase at any time of the year.
Devise a System
The very first step to devise a stock system is to gather information about the products. Different organisations have various techniques for doing this which range from manual templates to highly specialised software. With the help of an accounting firm in Johor Bahru, they will inspect what works for your organisation as well as assist you to execute it.
An effective inventory management system will be incorporated with your accounting system to ensure that all the elements of your operation can be well synchronised. The system can then supply you with updated financial information about your organisation. This will become handy when you need to know how well your organisation is performing and enhance the decision-making process.
Know Your Gross Profit Margin Well
If your gross profit margin is not sitting in a satisfactory position, it is time for you to inspect the accounts to see where the issue lies. Your gross profit margin is determined by deducting the cost of sales from Sales. When an obvious downtrend of a specific product, you probably want to put a stop to it. This can be quickly figured out via your sales inventory.
If you are still confused, you can start slowly with these tips and at the same time engage an accounting service in Johor Bahru.