Stock Company Management is the process of managing stocks, i.e. items that must be tracked and stored. They can comprise work in progress (partly finished materials and goods) or products that are finished, along with consumables, such as photocopier toner and stationery. The cost of managing these stocks can eat up a large percentage of the capital invested in a company, so an effective control of stock is crucial for profitability and cashflow.
Stock management techniques are varied and the one that is right for your business depends on the kind of products you offer and your industry. Some companies, like use computer software to keep track of inventory and keep track of cost. These programs are often integrated with point-of-sale machines and freight tracking systems. These programs are more expensive than manual records, however they can reduce read the article the chance of mistakes and improve accuracy.
Other companies use a process known as Just In Time or JIT, which reduces the cost of storage and inventory by reducing stock to a minimum. This requires precise forecasting and a reliable supply chain, however it can help reduce customer service issues like out-of-stocks. Certain companies also employ a formula called Economic Order Quantity to determine the amount of stock to keep in order to balance the need for security stock with the cost of storing and ordering extra.
It is essential to establish procedures for keeping accurate records of stock and examining them regularly or through a periodic audit or a full stocktake. To avoid corruption and fraud it is recommended to separate the employees who handle stock control from those who handle accounting and finance.