Stock Company Management is a process for managing stocks which are items that must be recorded and stored. They could include work in progress (partly finished goods and materials) or finished products, as well as consumables such as stationery and photocopier toner. Controlling stocks is vital to cash flow and profitability.
Techniques for managing stock vary and the one that is right for your business depends on the products you offer and your industry. Some companies, for example employ a computer program to monitor stock and keep track of cost. These programs are typically integrated with point-of-sale equipment and freight tracking systems. These programs are more expensive than manual records, however they can reduce mistakes and increase accuracy.
Certain companies employ a technique known as Just In Time (JIT) which can reduce inventory and storage costs by reducing inventory to a minimum. This method requires accurate forecasting, a reliable supply network, and can minimize customer service issues, like out-of stock. Some companies use a formula known as Economic Order Quantity (EoQ) to determine how much safety stocks to keep. This formula weighs the need to order and store extra stock, as well as the cost of ordering and store it.
It is important to establish procedures for keeping accurate stock records and checking them regularly. This can be done through a periodic review or a full stocktake. It’s also a good idea to separate the employees who are in charge of administration of the stock control from those who are responsible for accounting and finance, to avoid corruption and fraud.