Other than payroll expenses, the only additional major expense for a lot of businesses is the cost of goods sold, and inventory is a significant part of a business’ financial statements which can be effectively managed by an expert accounting service in Singapore.
Do you know how well your sales inventory is managed and do you have access to information on what your stock looks like at any point in time? Managing your inventory effectively is important too because your sales activity depends solely on having the right products that your customers need when they need them.
By managing your inventory levels effectively, you will never lose sales due to items going out of stock, and you will also avoid having in stock too many products that are not in demand by customers.
Implement a System
Being able to monitor your sales inventory starts with having a way to monitor your products. Different businesses have different methods for doing this which range from manual methods and spreadsheets to more specialised software. With an expert in accounting services in Singapore, they will check what works for your business and help you implement it.
An effective inventory management system will be integrated with your accounting system so that all the components of your business can be in sync and provide you with updated financial information about your business. This will give you a handle on how well your business is doing and will aid decision making more efficient.
Keep Tabs on Sales Activity for Inventory Needs
By keeping close tabs on your sales activity, you will be able to know which of your products are doing well in the market and which ones are not. An effective inventory system helps you monitor your sales activity, so you can know which products to stock to meet your customers’ demands and which ones you should not. You would not want to overstock to avoid the risks of damage, theft or becoming obsolete.
This will help you mitigate the effects of a slow sales period by not tying up your capital in goods that are lying on the shelf. This is why your business needs an expert accounting services Singapore provider to stay on top of these things. Check your sale trends on a monthly, quarterly and annual basis so you can identify those things that you need and do not need in your stock at specific times of the year.
Understand Gross Profit Margins
If your gross profit margin is not where you would like it to be, it is time for you to check your accounts to see where the problem is. Your gross profit margin is measured by deducting the cost of goods that are sold from product sales. In this case, there may be a particular product slowing things down which you may need to discontinue. You can figure this out through your sales inventory.
If you are feeling overwhelmed, you can start slowly with these tips and with the help of an accounting services Singapore expert, you will find it easier to balance your books.