Don't Get Wrong in Inventory Accounting! Use Software for Faster and Accurate Bookkeeping!

Inventory accounting - Accounting which is well-known in economics consists of several types. The commonplace accounting that is often encountered is financial accounting, management, tax accounting and so on. Unfortunately, little is known about the accounting for this type of inventory. That is because this accounting can only be known in the business world. For those who don't work in the business world, this type of accounting still sounds foreign.

This type of accounting is widely used in businesses related to production and trade. This is because it has something to do with the stock of goods. As the name implies, this accounting focuses on items that are stored or maintained for business purposes with a normal cycle.

Especially for manufacturing companies, this type of accounting bookkeeping plays an important role. This is because the company must be able to provide everything from raw materials, semi-finished goods to finished goods.

Purpose of Bookkeeping Accounting for Inventories

Inventory accounting is considered important for businesses. The existence of inventory can affect the value and also the price of the product at the end. In the ledger, this inventory has a contribution in compiling the work sheet. In addition, it also affects operating profit and loss. Errors in this calculation will have a fatal impact, namely incorrectly determining product prices.
There are three main purposes of inventory, namely to present information to companies related to how much value the product has produced and also produced. Value can be obtained from company value or with certain assets or without certain assets. The last one is to present inventory information to predict future cash flows.

Benefits

There are several benefits that can be obtained from the following inventory accounting books:

Calculate profit and loss

The first benefit is being able to calculate profit and loss. With this bookkeeping you can make a comparison between the cost of income and also the cost of production. Both costs are related to COGS or Product Cost or COGS.

The cash flow was getting crowded

This bookkeeping will make cash flow even more crowded. Inventory bookkeeping will provide information which relates to inventory. This can enliven future cash flows for both users of financial reports and to investors.

Product value information

By using this inventory accounting, the company will be able to know the value of the product that was successfully produced. Not only that, the company also knows how much value it generates. This value will be obtained from the difference in the value of the company with a certain number of assets and without certain assets.

Classification

In bookkeeping, there are classifications that must be known. This classification can only be done by trading companies and manufacturers. Service companies will not be able to because they do not have inventory that will be stored and also processed.
In bookkeeping there is a classification of merchandise. These goods are obtained directly from the main company as well as from the main producers for resale. The next classification is raw materials which are often referred to as raw materials or raw materials for goods that have not been processed or processed into certain goods or products. After being finished, it will be sold to consumers.

Furthermore, there are auxiliary materials which are not the main thing but as a reserve stock. This item is for completing the final product. The latter are semi-finished goods and finished goods.

This accounting bookkeeping requires carefulness and accuracy. Just a little wrong will make the recording results inaccurate. You can automate inventory accounting with accounting software from SOLTIUS, we are the best and experienced business-based IT solution provider company in Indonesia, with our solutions you can make accounting books faster, more systematic and accurate, contact the contact to get more info. contact us for more information or visit the following pages: https://www.soltius.co.id/id/special-offer/read/accounting-software-akuntansi