The current asset that are represented in balance sheet are the stocks that the business deals. Inventory management should be an integral part of the management system cause it’s like the two-edged sword having too little and too much harming the organization, both in the short run and in the long run. The cost of an unsatisfied customer or the expense of looking after the inventory can be damaging the sources of the small business.

First-In-First-Out (FIFO) wherein the stock that is bought first is sold . With this method, the remaining items are portrayed in the latest market price.

Last-In-First-Out (LIFO) at which the item purchased recently is sold . This method might cause variance concerning the purchase price of the stock left and the present market price. But the profit amounts are revealed to be reduced with this particular method. LIFO method results in undervaluation of the stock compared to FIFO method. The accounting principle of relevance may strike as incompatible with the LIFO method of stock maintaining.

Typical Price method (AVCO) that takes average of these things by taking weighted average of these products. This is useful when the items are of comparable character, or when the individual costs are difficult to be determined. This is much helpful compared to last strategy under discussion. Actual unit price method, which can be applicable if the items are less in amount, or if they’re of expensive nature is precise but utilized the least among the above methods.

No matter the method of this process of calculating inventory, any stock - from raw materials, work-in-progress or finished goods, gas or lotto - involves bringing down the stock from the last accounting period i.e., the launching stock, adding to it some purchases made and deducting the amount of earnings done. The balance is carried down as the final stock. The fitting concept of associating expenses of these goods sold to the concerned accounting period ought to be followed.

Costs related to inventory management include software or registration in the vendor company (which offers the services), hardware’s such as bar code scanner, mobile and or laptop, worker training price and maintenance price. Inventory management could be done with the fundamentals including the bare minimum of spreadsheet - undermining features like real time data monitoring and historical data - or technical solutions that might be expensive but provide improved features. Whatever curso de orcamento de obras , the direction should be wise enough to pick the best alternative so that the company is prepared for the present in addition to the long run.