It’s really difficult to balance glutes and shortages for e-commerce businesses with complex chains of supply. To achieve a proper balance, proper management of inventory should be done. This is a process of ordering, storing, and using the business’s inventory including the raw materials, finished products, and components, as well as warehousing.
Proper management supports this cycle:
You need something to sell. So you search around and find a good supplier. Purchase Order is the document that itemizes the terms of the arrangement, including exactly what you're buying, how much you're paying, and what the terms of delivery are. some times you pay them in advance, Sometimes a partial amount is paid. In case of the partial amount paid, the cash paid is called as 'Deposit' or 'Prepaid Inventory'
you need a clear understanding of when the title passes from the supplier to you. Knowledge about proper recording is a must for this is fully legal ownership, provided that the buyer incorporates his identity.
When the product is ordered, it is then secured. From here on, it’s time to record this into your books ensuring that the deal is made. Assuring that the date is being followed up on the invoice release will increase the potential of gaining trust. This will also determine the legality of the transaction.
Keeping an eye for a storage fee should always be done. This will save you from charges that might include in the storage system.
Probably the most complex part of the process. This is where the product purchased moves from the balance sheet to an expense – the cost of goods sold. Keeping track of related costs will ensure the proper line-up with the sales arriving at an accurate cost of goods sold number.
As you think about improving inventory management for your e-commerce business, there are things you need to look for like the challenges you have faced and overcome, the proper approach to each possible difficulty, and WHO will help you in your e-commerce inventory management. Try asking a Virtual Accountant/Bookkeeper, for sure they have the skills that will aid you and you would want to use these.
A bookkeeper reinforces a need for supply and demand. If there’s an imbalance between the two, business is sure to fail which is an unpleasant thing to happen. Avoid unpleasantries, manage your inventory properly.
Want tools that will help you in managing your inventory? Check out this list.
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Explore the differences between Bookkeepers, Accountants & Controllers
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With the growing business needs and competition, the need for Bookkeepers, Accountants, and Financial Controllers also increases. To kick start a good business the need for good books is a must. To go with hand-to-hand accounts, we need books to be written which is done by Bookkeeper and to .......
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