The implications of poor inventory turnover management for companies.
Written by:Diomer Antonio Galán Rincón.
Bachelor's Degree.Public Accounting / MSc.Science of Higher Education.
Introduction
Inventory management is a central point to avoid financial problems in the organizations, it is a fundamental and indispensable element in the production of the companies, since it is the most liquid current asset and it is the main impulse that moves the organizations, since it is the basis for marketing that allows them to generate profits and sustained growth.
Inventories originated with the Egyptians and other ancient peoples, who used to protect large quantities of food and supplies to be consumed and used in times of drought or calamity. This is how inventories arose, as a way to cope with periods of scarcity and with the clear knowledge of how much merchandise they had stored. In this way it would allow to assure the subsistence of the organizations in time and the development of their operative activities in an objective and correct way.
On the other hand, the inventory turnover is the way to see the assets in a tangible and perceptible way, in many occasions it is not an easy task, but it is not difficult either and although it can be a tedious exercise, it is a fundamental part in the development of the companies, the inventories represent a very large percentage of the investment on the working capital of the companies regardless of their size.
Therefore, an optimal management of inventory turnover will contribute to achieve better results in the closing of the accounting, economic and administrative cycle of companies with benefits in profits and would be maximizing the use of the organization's resources. On the contrary, if a good inventory management is not carried out, storage costs may increase and the capital required for the development of the organization's operations will increase, which will manifest itself in the future in a loss of value.
Conclusion:
We can emphasize that effective inventory management, regardless of the size of the organization or company, is essential for rapid growt.
Maintaining an effective rotation of merchandise inventories in stop will bring with it the availability of merchandise in good condition for sale.
I hope you like my article and I would appreciate all your comments.
bibliography consulted:
1.- Cabriles G. Ysabel L. (2014). Proposal of a safety stock inventory control system to improve the purchase management of raw materials, spare parts and supplies of Bagres C.A. company.
2- Correa Yusty Julián Alberto (2010). Process of improvement in inventory turnover in Group C. Lozano Frexco S.A.S.
0
0
0.000
True to that! Some businesses are not good with their inventory management, ending they either oversupply such products or having a shortage.
Poor management can also lead to possible loss of potential earnings as not all items are properly audited.
Small scale enterprises usually have these problems as they are either not aware or not trained to do the proper management of their inventory and I agree with you it is not hard but definitely tedious as you need to document each one of them properly to make sure that everything is correct.
Greetings @ tpkidkai, there is no doubt that the proper management of inventories is fundamental in companies regardless of size since they represent the life of the organization. A bad management can lead to the ordering of certain material and therefore, unrecoverable financial losses for the organization.
Thank you very much for your comments
Hello @dgalan
Globalization and its mistakes, will end up creating greater evils to humanity, when you say "despite the great efforts made with the setting and control of prices, the country has been affected by the inflationary process that currently reigns in the market", I sense that you are not taking into account external factors such as international restrictions that fall on Venezuela, if this is not included the data have a lot of noise therefore lack objectivity.
Best regards, be well.
Greetings @ lupafilotaxia
There are many elements that are causing hyperinflation in the country and therefore affecting inventories,
One of them is as you mentioned in the publication and I share with you your opinion is the economic blockade in the country, this is certainly important, but we must also take into account the free trade that affects SMEs, for their limited room for maneuver and investment capital compared to large corporations, which affects the production of goods and services for the population.
Thank you very much for your comments
Congratulations @dgalan! You have completed the following achievement on the Hive blockchain and have been rewarded with new badge(s) :
You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word
STOPthank you very much for the distinction
You're welcome @dgalan.
BTW, it would be much appreciated if you support our proposal on Peakd, ecency, Hive.blog or using HiveSigner so we can continue our work!
https://peakd.com/me/proposals/147
Thank you!