What is our main goal of inventory management? Decreasing the cost, of course! Inventory is typically broken up into raw materials, work-in-progress, and finished goods. For our clients, we often also help calculate inventory holding costs. Depending on your business context, your inventory and inventory costs will be unique; however, the management of inventory is critical in the cost structure of your product.
There are a variety of techniques that can be implemented in managing your inventory. More often than not, the goal of these techniques is to free up cash flow and shorten your operating cycle.
Inventory management goes hand in hand with both cost accounting and operating cycles. The name of the game is to produce as much as you can sell and to make the most profit on it as you can. Full Cycle CFO will show you inventory holding costs and aid in effective cost control of your operations. We can help you make those decisions: “Should I be producing more?” or “Should I be producing less?”. With us helping you run these analyses, it takes the guess work out of it so you can make the most informed decision for your business. We can help you understand what items are your best sellers and what items to cut back on. With us helping you understand this demand, you can effectively make better buying decisions, improve your storage capacity and cash flow. With Full Cycle CFO there to help you manage your inventory, you can have a better grasp on your operating and cash cycles. We want to help you fit all the pieces together to keep your business successful and profitable.