Inventory inventory with processes, optimization methods for business

In the process of operation, inventory not only the property but also the factors that directly affect cash flow, cost of warehousing and business performance overall. However, many businesses today focus only on numbers for revenue and profit that ignore or downplay the inventory – led to serious consequences such as cargo losses of unknown etiology, bookkeeping false, financial reporting is not accurate, even the risks in internal auditing.

Operation excess inventory helps businesses collate between actual data and the data recorded on the software, from that early detection of false or fraudulent in the process of operation. This is also an important base to assess the capability of the logistics department, policy adjustments, income, sales or liquidation of inventory do not match.

This article Lac Viet Computing will help you understand:

• The concept and the actual role of excess inventory.
• The form – method of inventory downloads.
• Implementation process inventory efficiency.
• Application of technology in inventory and help the business inventory faster, more accurate, more intelligent.

1. Overview of inventory inventory

1.1 inventory what is inventory?

Inventory inventory is the process of verifying the amount, the actual status of the commodity is stored in the repository, then collated with data already recorded on the accounting system or warehouse management software.

Other than the statistics repository mere – capital recorded only top quality import, export, and remaining in theory – inventory requires to check directly at the scene to ensure that the data “on paper” matching figures “reality in stock”. This operation is usually done periodically (by month, quarter, year) or unscheduled (when in doubt, misinformation or audit requirement).

For example, company A recorded in the software inventory 1,000 units products. But when reality check at the warehouse only 950 units. This difference can only be detected thanks to the inventory, is the facility to adjust the window list, determine the cause of loss, avoid repetition in the future.

1.2 objectives of The activity inventory

The inventory of unsold, not merely as an administrative procedure that brings a lot of practical value:

• Detect deviations between books and reality: This is the important goals top. The difference may come from confusion in the stage of import – export recorded the wrong code, fraud or loss due to conditions storage is not guaranteed.
• Reviews attrition losses: inventory and help the business determine the rate of natural shrinkage (due to damaged, expired, shrinkage, break...) and the rate of loss is unusual. From there take measures to adjust or liable for prosecution.
• Decision support management of inventory: From inventory data, business can make a decision on liquidation the slow rotation, the transfer between the branches, the adjusted purchase plan or forecast inventory levels optimal for states to come.
• Increase transparency in finance: inventory inventory helps ensure accuracy for activity analysis of financial statementsespecially in the states of internal auditors, independent audit or when business called capital and IPO.

In summary, inventory inventory is the webmaster tools help business while minimizing operational risk, medium optimal financial performance.

2. Principles of inventory inventory circular 133 and 200

2.1 excess inventory circular 133: Rules and principles need to know

Theo quy định tại Thông tư 133, việc kiểm kê hàng tồn kho không chỉ là yêu cầu kỹ thuật kế toán mà còn là nghĩa vụ quản lý tài sản của doanh nghiệp. Cụ thể:

Business must make an inventory periodically or irregularly: The inventory periodically, usually held at the end of the financial year to serve financial reporting. In addition, the inventory can also be done any time when there are signs of irregular (ventricular escape, suspected fraud, change the person in charge of stock...).

When there is a difference between books and reality accountant must: clearly Identify the cause of the difference (due to errors in recording, loss and natural shrinkage or fraud...). >>> Record inventory of recorded real-world data, data books, and the difference. Accounting processing in accordance with regulations:

• If goods shortage, depending on the cause, accounting record in cost of production – business or other costs.
• If the goods are in excess, after verification of unknown causes, the difference is recorded in other income.
• If any goods damaged, lost qualities, to make a record private solving specific (sale, liquidation, destruction...).

The recorded inventory results must be transparent to the true essence and timely: This is required to ensure the integrity of financial reporting, and help business understand the value of the property inventory practice.

A number of important note when inventory circular 133

• Record inventory must have full signature: include a signature of the warehouse (the direct inventory management), the test statistics (due the designated leader), accountant in charge to ensure accountability, solidarity, transparency, anti-fraud-in-process inventory.
• Goods sent for sale, send machining must also be monitored inventory: Although not located in the repository at the physical business, but this is still property owned, need separate tracking and inventory periodically. This business does not overlook the property when drawing up financial statements, at the same time risk management with the receiver sending/side machining.

2.2 excess inventory circular 200: principles mandatory requirements

Follow Thông tư 200/2014/TT-BTC, Bộ Tài chính yêu cầu tất cả các doanh nghiệp thực hiện kiểm kê hàng tồn kho theo nguyên tắc bắt buộc kiểm kê tối thiểu một lần vào cuối kỳ kế toán năm. Đây là yêu cầu bắt buộc nhằm đảm bảo:

• Verify the correct quantity and quality of the actual value of the goods remains in the warehouse
• Collation of fact with bookkeeping to timely detection of deviations, losses, errors or accounting and inventory management
• Is an important basis for financial reporting honest, reasonable, service audits, inspections, tax and financial decisions last year

Not carry inventory or inventory form can lead to serious deviations in the financial statements, affects the reliability of the business in the eyes of investors, banks, and state agencies.

The inventory process is not only a procedure of accounting which aims to:

• Collate the number of inventory reality with bookkeeping to ensure the accuracy
• Check the inventory status: Restaurant used to be, damaged, obsolete, or no longer worth using
• Discovery, inventory, slow-moving, from there make a decision, discount, liquidation or disposal to avoid the cost of storage lasts
• Provision for decline in value of inventories if the net worth may be made of the goods (sale price expected minus cost of sales) lower than the original price record window. This is to reflect the realistic value of inventory on financial statements.

In the case of inventory discovery:

• Items missing: Enterprises need to identify the cause (of loss, errors, take notes, natural shrinkage...) and making detailed inventory, thereby determining compensation liability (if any), or handling costs in accordance with the regulations.
• Superfluous: If not determined the clear cause, the difference is recorded in other income.
• Damaged: Must be confirmed in the actual state, recorded decline in value or accounting destruction, depending on the status of use.

All the difference inventory must be written clearly, with the signature of the warehouse, accounting, the inventory of independence, as a base handle accounting.

Special cases need inventory immediately

In addition to any inventory periodically, the business must also carry inventory unscheduled in the following situations to promptly handle the risks to ensure safe assets:

• Signs or suspicion of fraud, loss: As data warehouse does not match, inventory report irregularities, suspected internal fraud.
• Natural disasters, fire, epidemics affect inventory: To determine the level of damage, the base of the handle insurance adjusters financial planning.

To change the stock or delivery of property: Before delivery repository for new people in charge, need a complete inventory to determine the exact amount and the status of the goods, avoid disputes or losses later.

3. Inventory inventory has the form?

Excess inventory is not only a way to make unique. Depending on the business characteristics, scale, frequency, operating warehouses, businesses can choose the form of inventory appropriately in order to guarantee the accuracy, saving time and resources. Here are the three most common forms today:

3.1 inventory inventory periodically

This form of inventory is done according to specific plans usually occur on the timelines like the end of the month, end of quarter, half-year or year-end financial. The entire warehouse will be ceased trading in short duration to serve for the inventory.

Advantages:

• To help businesses easily set up financial reports accurately.
• Create a routine inventory management, cycle clear.
• Fit model business manufacturer or trade have the schedule stable operation.

Note: Due to are large-scale activities should be inventoried periodically can cause temporary interruption in import goods, requires thoroughly planned, there is coordination between the parts.

3.2 inventory inventory unscheduled

Form is the inventory not in the plan are periodically made when incurred doubt there are deviations, loss, or at the request of the audit committee, senior management authorities.

Advantages:

• Help detect timely processing of unusual problems such as fraud, errors or loss of goods.
• Increase transparency initiative in commissioning internal.

For example: A business detects the number of rows in the system other software with top quality warehouse staff report export, import, inventory daily. Management may require inventory unscheduled to determine the cause, putting the processing right.

Note: Need to perform in a professional manner, with the participation of stakeholders (inventory, accounting, internal control), and that minutes are recorded clearly.

3.3 inventory inventory constantly

This form of inventory is done regularly, continuously throughout the commissioning process inventory – does not depend on the fixed cycle. The data is updated in real time thanks to the software system inventory management and scanning technology code.

Advantages:

• Always grasp the amount of inventory accuracy at all times.
• Fast detection of errors arising during the day, limiting the backlog risks.
• Minimize interruption time warehouse operation compared with the traditional millet.

For example, businesses like ecommerce chain supermarket, drugstore or floor APPLICATIONS often apply inventory constantly, thanks to software management integrated bar code scanner helps to check and update inventory daily.

Note: inventory continuously develop the highest efficiency when bundled with the system of specialized software, data synchronization between the warehouse and the accounting.

The choice of form inventory of fit will help the business not only ensure accurate data but also reduce operational risk, optimize costs, manage inventory more efficiently. In fact, many business flexible combination all three forms to achieve maximum efficiency – for example, inventory constantly in January and inventory periodically in the quarter, combined inventory of unscheduled when in need.

4. Diagram process inventory inventory standard for business

The excess inventory is not merely count the number of physical quantities in stock which is a process management requires coordination between multiple departments: accounting, logistics, internal management and technology. A process inventory, it not only helps businesses ensure accurate data, but also minimize the risk of fraud, loss, losses, costs, potential.

Step 1. Preparing the first inventory

Goal: Ensure the inventory process is quick, compact, accurate, and transparent.

The steps need to perform:

• Inventory planning: Business needs determine the time, scope, inventory (in whole or in group), method of applying the same personnel involved. Planning in advance helps to avoid coinciding with the peak period or time import dense rows.
• Inform the relevant parts: Make sure all parties understand time inventory to prepare human resources, does not arise operations of import/export in the period of the inventory.
• Assign tasks, clear: Each member should be assigned specific roles: people counting, people of records, who collated data, the supervisor... this helps to avoid overlapping increase transparency.
• Key data window, fixed location of the goods: suspend all activities of import/export warehouse in window warehouse at the time “cut-off” to make a base of comparison. At the same time, clearly mark each area warehouse, classification of goods under the code – group – position to easily check recorded.

Step 2 perform inventory

Objective: to Confirm the number of actual, collated with the data recorded on the system.

How to perform:

• Choose the method of inventory match:
  • Craft: User votes inventory, tables, statistics paper – fit small business or a simple inventory.
  • Semi-automatic: Use the barcode scanning device connection software – more efficient for large warehouses, more code to help avoid errors recorded.
• Recorded real-world data: The inventory count the number of each item, record the results in the inventory panel. With business application software repository data will be automatically pushed to the system after scanning the code.
• Collated news forecast: actual figures are compared with data system (bookkeeping or management software inventory). Detect the difference at the time of inventory makes it easy to trace the cause.

Step 3. Handle difference, make a record

Goal: Ensure transparency – trace the causes of the deviations.

• Identify the cause deviations: With each account disparities, should make it clear reason: wrong notes, strayed physics, the wrong code, or fraud. May require parts related explanations with evidence from if available.
• Accounting processing: Depending upon the cause, the business will make adjustments to increase/decrease inventory on accounting system. All adjustments need to comply with specified financial – accounting regulations (e.g.: accounting for the difference in cost, provisioning...).
• Record inventory: fully recognize the situation inventory results collated handle. The minutes should be signed by the parties related: masturbating, warehouse, inventory, student, accounting and management.

Step 4. Analytical decision-making

Goal: don't stop at the record, which data mining inventory to improve inventory management.

• Report inventory results: overall statistics of the amount of inventory fact, the rate difference, the cause arises and trends across the states. This is the basis to help enterprises assess the quality of the management repository.
• Proposed processing backlog: With overdue items, slow-moving or excess, for unknown reasons, the need to propose as liquidation, transfer, or stop typing.
• Optimize the inventory levels: If inventory constantly shows daily balance, often in a group of products, businesses need to adjust the inventory levels reasonable to save costs of storage.
• Alert management: A system can be integrated alarm function if the rate difference exceeds the permitted level. Solutions such as LV Financial AI Agent not only helps enterprises automatically collated data warehouse – accounting – financial, but also hints anomalies based on analysis of historical data, to help managers early detection of errors or fraud in the internal.

Process inventory inventory should not be considered mandatory procedure that is instrumental in strategic management that helps businesses minimize risk, optimize the performance of storage transparency of the financial system.

5. Inventory methods popular today

The choice of method of inventory fitting can directly affect the effective management of the business. Depending on the scale and nature of goods and the level of technology application, business can choose the method of inventory differ. Here are three common method businesses can apply.

5.1 Methods of counting craft

Here's how inventory of traditional employees directly counting each item and record the results into a notebook or Excel spreadsheet.

Advantages:

• Fit small business scale, the simple, the number of goods not more.
• No investment costs into software or equipment.

Cons:

• Easy-to-happen errors depends on the person (confusion, omission or false).
• Time-consuming, especially with the inventory has many items, or periodic inventory constantly.
• Difficult to detect trace the cause if there is a discrepancy in the data.

Actual benefits if applied the right way: With a small business or big business, inventory crafts if any, form delete, organize inventory periodically can still help control the goods, avoid loss.

For example: A grocery store inventory weekly by printing the list of goods from Excel and collated fact according to each display shelf.

5.2 Method of scanning a barcode – semi-automatic

Use the device to scan barcodes (barcode or QR code) to check the goods, collated data with warehouse management software.

Advantages:

• Minimize errors, take notes by hand.
• Speed inventory more quickly, especially effective with warehouse have many code.
• Easily sync data with your accounting system or ERP.

Cons:

• Need initial investment for scanning equipment and software.
• Staff should be trained to use properly.

Practical benefits: Suitable for medium businesses – large, needs regular inventory. The inventory of semi-automatic help businesses proactively grasp the status of inventory in real time, from which to make decisions, import – export fit, avoid backlog or deficiency.

5.3 inventory software combines artificial intelligence (AI)

This is the most modern methods available today, combining warehouse management software and artificial intelligence to control the whole process inventory, data analysis, given early warning.

Advantages:

• Automatic detection, analysis of variances irregular between the data system and practice.
• Integrated with the accounting system, inventory, fixed assets, help create data flow throughout.
• Minimize manual intervention, improving reliability – transparency in the inventory.

When businesses use solution tools data analysisnot only inventory is fast accurate but also to receive automatic reporting about the cause deviation shed, risk alerts, inventory unusual suggestions corrective actions. Help businesses save significant time, cost and improve operational efficiency.

For example, A retail chain using the software LV Financial AI Agent to inventory in real time. Automatic system notifications when there are any discrepancies inventory exceeds allowed, at the same time given forecast trends in the consumption of each group of goods in coming months, helping to adjust the plan import.

No method of inventory what is best for all, important is the fit with the scale and the management goals of the business. However, current trends are leaning solution app technology, especially software have integrated AI in order to optimize the entire process inventory, limited risk, support timely decisions.

6. Application LV Financial AI Agent in inventory and inventory analysis

The application of technology in inventory analysis inventory report not only helps reduce the load of manual work, but also to support the management decision fast more accurate. With LV Financial AI Agent, business can harness the maximum potential of your data warehouse in the financial and operating.

• Automation collate data inventory reality and accounting: LV Financial AI Agent helps to automatically compare two sources of this data in real time, quickly detect the mismatches, at the same time hint causes to handle. Reduce audit risk, avoid false numbers in financial statements, increase transparency in inventory management.
• Analysis of the inventory index: rotation, DSI, ratio, standard deviation, LV Financial AI Agent calculate automatically presents these metrics in a visual way.
• Warning goods slow rotation suggesting optimal inventory levels: the AI System tracking history import – export – survive to get to know where is the group sales slow, or risk being “dead” on the shelf. Not only stop at the warning, LV Financial AI Agent also give suggestions adjust the inventory levels, logical, help businesses maintain top quality just enough, not redundant – there is no shortage.
• Integrated analysis of inventory and financial reporting management: A strong point highlights of LV Financial AI Agent is the ability to connect data inventory with the financial statements management overall. Help leaders capture the “financial picture” comprehensive from the warehouse to the balance sheet – through which investment decisions, distribution of budget or building sales strategy more precisely.

Excess inventory is not only a necessary procedure in accounting, which is also important platform for enterprises to control the property, the optimal operating and financial decisions more accurate. When done in a scientific way – combination of standard process with modern technology as LV Financial ONE Agent – the inventory will no longer be a burden, which became a strategic tool to help businesses increase efficiency, minimize risk.

If your business is looking for solution, excess inventory, fast, accurate and integrated financial analysis, deep, please contact Contact to get advice for free, or download the document detailed guide from team of our experts.