I is for InventoryThe A to Z of Profit Growth – I is for Inventory

 

It’s time for the next A to Z of Profit Growth… This week I is for Inventory!

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KMA The A to Z of Profit Growth – I is for Inventory

That’s it for this week’s edition. Watch out for next weeks episode.

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Hi, Kim here with your next profit growth advice. Today, we’ll cover I for inventory. When it comes to your inventory or work in progress for that matter, the top and bottom of it is, you need to minimize it or get rid of it completely. If it’s possible. I thought I would cover work in progress too as if you’re a service company, you won’t have inventory.

If you don’t sell any of the products you’ve invested in or invoice any of the work in progress within the time period that you’re working on, you are tying up valuable cash resources, which can’t be used elsewhere to make a return on investment. So the key here is to aim, to carefully manage your inventory and work in progress to ensure that your inventory level is as low as possible without crippling the business. So you don’t risk holding obsolete stock items, which you can never sell for a profit.

It’s always a good idea though, at the end of your financial year to review your stock and write off any item that is obsolete, and you’re never going to be able to sell. At least that will mean a deduction for tax purposes. If you have any questions on this, feel free to call me on the number below.

 

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