The "inventory" is a process in which all the stocks of a company or organization are recorded, verified, and evaluated at a specific point in time. The main goal of the inventory is to create an accurate record of all existing assets, materials, or goods and to ensure that the book stocks match the actual physical stocks.
Typical functions of software in the area of "inventory" are:
Inventory counting: Capturing and recording all existing items or products in the company's warehouses or facilities.
Inventory reconciliation: Comparing the captured stocks with the stocks recorded in the software or company's records to identify discrepancies.
Inventory valuation: Valuing the captured stocks based on various valuation methods such as FIFO (First In, First Out) or LIFO (Last In, First Out).
Reporting: Generating reports on the results of the inventory, including inventory valuation, discrepancies, and recommendations for actions.
Compliance: Assisting with compliance with legal requirements and accounting standards related to inventory.
Security and audit trail: Logging all activities related to the inventory and ensuring a secure and audit-trail documentation.
Types of inventory:
Continuous inventory: In continuous inventory, stocks are continuously monitored and counted, resulting in regular updating of inventory data.
Periodic inventory: Periodic inventory is conducted at a specific point in time and captures the stocks on that particular date. It is the traditional form of inventory.
Sampling inventory: Sampling inventory involves checking and counting only selected parts of the inventory, which can save time and resources but may be less accurate than a full inventory.