As accountant in manufacturing company, you have to keep track of how much you've sold and how much you have on hand. In company, if material is not bought on proper time due to bad tracking system of inventory, your labors will spend more idle time and your overall cost of product will increase. So, tracking of inventory with good system is must which give you proper information of how much stock was sold and how much stock was returned by our customer and how much stock is still in store.
So, for learning best system of tracking inventory, we are giving following simple steps to track inventory.
1st Step to Track Inventory
Classification of Inventory
In big manufacturing company, there may be large number of inventory in the form of raw material, assemblies, consumable material, scrap material, fuel and tools. For fast tracking each material, you have to do classification of inventory. For this you can choose small code of each material. Suppose, you can classify timber as 00, plastic material as 01 and metals as 02.
2nd Step to Track Inventory
Use Good Accounting Software for Recording Inventory
You can MS Excel, Tally.ERP 9 or Quickbook online for recording purchasing and selling of inventory. With this you can find out what is the quantity and amount of inventory of each item.
3rd Step to Track Inventory
Track Point to Sale Inventory
For tracking point to sale inventory, you can buy barcode scanner and attach it with your accounting software. All advance accounting software have the section of inventory management and If we show this the item of sold on point to sale, then we can fastly track it.
4th Step to Track Inventory
Like any other audit, company administration should audit each inventory by internal auditor. For this, physical quantity should be checked with book quantity of inventory. With this, all inventory fraud can be tracked. It will also helpful to reduce the cost of inventory.