Stock Company Management is a method for managing stocks, which are items that need to be tracked and stored. Stocks could include work in progress (partly finished materials and goods) and finished products and consumables such as photocopier and stationery cartridges. The cost of managing these stocks can eat up a large percentage of the capital that is invested in a business, and the need for effective stock control is essential to ensure cash flow and profitability.
Techniques for managing stock vary and the one that is the best for your company depends on the products you sell and the industry. For instance, certain companies employ a computer-based program to monitor stock and track costs. These programs are usually connected to point-of-sale machines as well as a freight tracking systems. They may be more expensive than manual stock records but can eliminate errors and improve accuracy.
Other companies use a process called Just In Time or JIT which can reduce the cost of storage and inventory by reducing inventory to the minimum. This requires accurate forecasting and a reliable supply chain, however it can reduce customer service problems like out-of-stocks. Some companies use a formula called Economic Order Quantity (EoQ) to determine how much safety stocks to keep. This formula balances the need to order and store extra stock, as well as the cost to order and store it.
It is important to establish procedures for maintaining accurate records of inventory, and checking them regularly. This can be done by periodic reviews or a complete inventory. It's also a good practice to separate staff handling administration of stock control from those involved in accounting and finance to stop corruption and fraud.