What Is an Inventory Record?
An inventory record contains information about the type and amount of stock an entity possesses. This includes inventory on hand, inventory that is on order, and inventory that is on hold for work-in-progress. It is also known as a stock record.
A typical inventory record can be found in either a manual or computer file. Its complexity depends upon the size of the company, the variety of products processed, and the volume of production. Many inventory accounts will have a description of each piece and information about its location, quantity, and identification number.
An overall inventory record contains data about all items in stock. It does not include any other conditions. This is typically the base from which other kinds of inventory accounts can be made.
An inventory record may also account for items in stock that will soon be put into production. This helps to give a company an idea as to when to re-order, in addition to tracking the regular flow of materials. It also helps an organization to determine what percentage of stock is in use at any given time and whether there is too much idle inventory. This can make it easier to determine how much stock to keep on hand and thus reduce the cost of maintaining excess inventory.
Another common piece of the inventory record is a list of which items are on order. This record can also help a company maintain adequate stock by revealing whether or not enough inventory is regularly on hand to keep production running smoothly. It can be an effective way to determine whether or not enough stock is being ordered, in addition to making a timeline for anticipated deliveries.
An inventory account will also track changes in inventory. This includes the amount of stock on hand, ingoing items, and outgoing items. Each item is tracked and, depending on the system, items may be organized by type.
There are several uses for an inventory record, from providing information on daily finances to preparing yearly taxes. It can be used to plan strategy, improve the cost effectiveness of operations, and to track the volume of production. By understanding where each piece is held, it is possible to improve the efficiency of operations by rearranging and maintaining stock in the location that is most beneficial for production. An inventory account can also help a company to ensure that inventory is not wasted, stolen, damaged, or otherwise made unprofitable.
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