Stock is cash sitting on a shelf. Here are the mistakes an accountant sees most often — and how to fix them.
In most small businesses, inventory is the biggest number on the balance sheet and the least controlled. These are the mistakes I see most.
You find out you are out of stock when a customer asks. Set a reorder level based on how fast the item actually sells and how long the supplier takes.
An item that sells out in two weeks with a four-week supplier lead time is already a problem. Your system should flag this.
Book stock drifts from real stock. Count regularly and adjust — and post the adjustment to the ledger, or your profit is fiction.
Base purchases on actual movement — average monthly sales over the last six months, not what feels busy.
If it has not moved in a year, it is not an asset, it is a loss you have not admitted yet.
With more than one outlet or store, you need to know where the stock is, not just that you own it.
If your cost price is stale, your margins are wrong and you may be selling at a loss without knowing.
YENU ERP gives you reorder analysis with six-month movement, lead-time warnings, location-wise stock and proper costing.
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