Inventory management 

is primarily about specifying the size and placement of stocked goods. Inventory
management is required at different locations within a facility or within multiple locations of a supply
network to protect the regular and planned course of production against the random disturbance of
running out of materials or goods. The scope of inventory management also concerns the fine lines
between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting,
inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available
physical space for inventory, quality management, replenishment, returns and defective goods and
demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is
an on-going process as the business needs shift and react to the wider environment. Inventory
management involves a retailer seeking to acquire and maintain a proper merchandise assortment while
ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify
inventory requirements, set targets, provide replenishment techniques and report actual and projected
inventory status. Handles all functions related to the tracking and management of material. This would
include the monitoring of material moved into and out of stockroom locations and the reconciling of the
inventory balances. Also may includeABC analysis, lot tracking, cycle counting support etc. Management
of the inventories, with the primary objective of determining/controlling stock levels within the physical
distribution function to balance the need for product availability against the need for minimizing stock
holding and handling costs

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What Does Inventory Mean?
The raw materials, work-in-process goods and completely finished goods that are considered to be the
portion of a business's assets that are ready or will be ready for sale. Inventory represents one of the
most important assets that most businesses possess, because the turnover of inventory represents one
of the primary sources of revenue generation and subsequent earnings for the company's
shareholders/owners.

Investopedia explains Inventory
Possessing a high amount of inventory for long periods of time is not usually good for
a business because of inventory storage, obsolescence and spoilage costs. However, possessing too
little inventory isn't good either, because the business runs the risk of losing out on potential sales and
potential market share as well.

Inventory management forecasts and strategies, such as a just-in-time inventory system, can help
minimize inventory costs because goods are created or received as inventory only when needed.

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Inventory is the total amount of goods and/or materials contained in a store or factory at any given time.
Store owners need to know the precise number of items on their shelves and storage areas in order to
place orders or control losses. Factory managers need to know how many units of their products are
available for customer orders. Restaurants need to order more food based on their current supplies and
menu needs

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 An inventory control system serves three general purposes, according to author Steven Bragg in his
book "Inventory Accounting": It must account for the quantity of physical inventory, its value and the
proper billing of shipped goods. Bragg described 68 individual procedures and controls.

Managing Stock
1. Inventory does not just "sit there" on a company's shelves; it costs money to store and
maintain, represents potential profits and, in time, becomes obsolete. A company must actively
manage its existing inventory.

One procedure is to reject purchases that were not preapproved, such as a shipment that arrives
without supporting paperwork. A second is revising safety stock for seasonal items, such as Walmart
stocking up on Christmas decorations in late November. A third is managing and sometimes
reducing products and options. This is what happens when a company like General Motors takes a
model out of production (thus inventory).

Managing off-site inventory--for example, in leased warehouses or by third-party logistics providers--

calls for four specific tasks: maintaining access to the off-site inventory; including off-site inventory in
total inventory; ensuring that inventory is accounted for in closing procedures (like month-end
accounting); and in conducting periodic audits of off-site inventory.

An effective system includes reviewing inventory for obsolete stock. This allows a company to
discount or discard that obsolete stock, write it off for tax purposes and better plan future
production. 

An effective system audits inventory material costs, which compares the theoretical costs with the
actual cost of materials. This way, a company can adjust its standard costs or manage its
purchasing department and vendors to adjust costs.

Shipping and Billing

2. Two basic functions of inventory control management, once inventory leaves the shelves,
are shipping and billing. Advanced shipping notices notify the customer that an order has shipped
and when the customer can expect the shipment. This enables the customer to plan resources, like
labor and shelf space. The customer must then be invoiced. In automated invoicing, the control
system recognizes a shipment and generates an invoice (usually through email) to the customer

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ACCOUNT RECEIVABLE

Your business has been reaping huge profits for years now, when all of sudden you find yourself in need of
fast cash. If you have tried several solutions without success, you may be interested in learning more about
accounts receivable management. But what are accounts receivable and accounts receivables management?

An account receivable is the money owed to a company by a consumer for products and services purchased
on credit. This is usually treated as a current asset of accounts receivable after the customer is sent an
invoice. Accounts receivable are known by various names, such as accounts receivable aging, accounts
payable, days receivable, accounts receivable turnover and invoice factoring.

According to the experts, accounts receivable or invoice factoring is one of a series

of accounting transactions. These accounting transactions deal with the billing of customers who owe money
to a person, company or organization for goods and services purchased. If you are seriously considering
using accounts receivable as a method of obtaining a more liquid asset, then it is wise to hire accounts
receivable management specialists.

Accounts receivable management specialists can help you in a variety ways:

It can cut and maintain your average collection delay or DSO 
It can lessen your direct and indirect expenses 
It can considerably reduce your bad debt 
It can tell you various ways to take advantage of your cash-flow 
It can help you capitalize on your internal resources 
It can maximize your interventions on sales, service and market share.

Hiring the best accounts receivable management will clear up the common misconception that the selling of
accounts receivable is a loan. Accounts receivable are the amounts that customers owe a business; this is
clearly shown on a company's balance sheet. 

Some also call accounts receivable trade receivables and try to classify them as current assets. Accounts
receivable management's main goal is to take care of all these debts and to record sales of accounts; one
must debit a receivable and credit a revenue account. Accounts receivable management also looks into
issues such as recognizing accounts receivable, valuing accounts receivable, and disposing of accounts
receivable.

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