Control your expenses with inventory management

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A major business expenses that can dent your profits is inventory. Keeping adequate control of inventory will keep your profits in good shape.

For a small business such as a retail shop or restaurant; their inventory includes all items that you purchase for resale. That includes all the shipping costs along with any other costs associated with the whole process of getting the items to your shelf or restaurant kitchen.

For example, in the restaurant business it is NOT easy to have adequate control over inventory without the use of technology. It is important for a restaurant to have some sort of inventory management/POS system that can count for every item of food before it is cooked, count plate portions and number of plates being made along with the selling price for each plate. This will generate reports that will allow the business owner and the accountant to make important business decisions. Without the use of technology or by not having a professional look at your numbers the restaurant could be losing money on wasted food.

A good accountant or bookkeeper will help you analyze your transactions by creating financial statements and interpreting these statements to you which in turn will help you make vital decision for your company. There are formulas that are used to evaluate inventory and sales performance such as the Inventory Turnover Ratio or margin on sales. Speak with your accountant to discuss your inventory to see if there are any improvements to be made.

If you need assistance with your business finances or taxes feel free in contacting us at Business Solution Center | [email protected] | 956-466-4503 in Brownsville Texas.