Inventory management is an essential part of every commercial enterprise. Effective Inventory management is important for ensuring a business has sufficient stock available to satisfy customer demand.

1. Christine Ross Hooksett NH - Online Inventory
Management Types and Cost
The current assets that are represented in balance sheet are the inventories that the
commercial deals. Inventory management should be an integral portion of the
management system because it is like the two-edged sword with too little and too
much harming the business, both in the short run and in the long run. The cost of
an unhappy customer or the cost of looking after the inventory can be hurting the
resources of the business.
First-In-First-Out (FIFO) wherein the Inventory that is bought first is sold first.
With this process, the remaining items are portrayed in the latest market price.
Last-In-First-Out (LIFO) where the item bought recently is sold first. This
method may effect in variance regarding the price of the stock left and the current
market price. But the profit levels are revealed to be low through this method.
LIFO method results in undervaluation of the inventory compared to FIFO method.
The accounting principle of relevance may strike as incompatible with the LIFO
method of inventory keeping.
Average Cost method (AVCO) which takes average of the things by taking
weighted average of those items. This is beneficial when the items are of similar
nature, or when the individual costs are problematic to be ascertained. This is much

2. cooperative than the last method under discussion. Actual unit cost method, which
is relevant if the items are less in number, or if they are of expensive nature is
precise but used the least among the aforementioned methods.
Whatever the method of the method of calculating inventory, any inventory - from
raw materials, work-in-progress or finished goods, fuel or lotto - involves carrying
down the inventory from the previous accounting period i.e., the opening stock,
adding to it any purchases made and deducting the number of sales done. The
balance is carried down as the closing stock. The matching concept of associating
expenses of the goods sold to the concerned accounting period should be followed.
Costs related with Inventory Management include software or registration in the
vendor, hardware's like barcode scanner, mobile and or laptop, employee training
cost and maintenance cost. Inventory management can be done with the basics
including the bare minimum of spreadsheet - compromising features like real time
data tracking and historical data - or specialized solutions which may be costly but
deliver enhanced features. Whatever the option, the management should be wise
enough to select the best alternative so that the business is ready for the present as
well as the future.
Some software offer the material requirement planning while others give a picture
of what the demand would be like in the future. The integration with accounting
application minimizes the time and cost as well as trims down manual errors. The
guidance system is provided for by the vendor of the software.