Inventory aging report and why organizations should have it
Inventories and stocks are an imperative part of businesses and it is crucial to keep a track of them for making better decisions and strategies. Generating accurate and timely inventory aging reports can bring a massive shift in your business growth. When handled properly, inventory aging reports can aid in getting rid of outdated goods which opens up prospects for more sales resulting in satisfied customers. To know better about inventory aging reports, let’s go through the details shared below.
What is an inventory aging report
An inventory aging report or stock aging report represents the key metrics on the status of inventories utilized in the firms. In essence, it is a list of the inventory goods arranged by how long they have been in stock. The aged inventory report is the simplest tool for identifying slow-moving or obsolete inventory that needs to be revalued in order to accurately compute your cost of goods sold. The insights from inventory aging reports enable business owners to predict some of the potential occurrences that could affect the firm in business.
Key takeaways from inventory aging report
Inventory aging reports provide many crucial key takeaways which are significant while handling stocks and inventories in the organization. Following are some of the important key takeaways provided by the inventory aging report.
Inventory aging reports enable us to concentrate on slow-moving objects more effectively:
The inventory aging report shows you which products are slow to move or aren’t moving out of inventory at all. This is keen on figuring out why some products remain in stock for a longer period of time than others. The products you order in the future may be affected by this data.
The ability to make decisions regarding the quantity and timing of inventory purchases can be improved by inventory aging reports:
Inventory aging reports enhance the decision-making process for purchasing inventory. With knowledge on which products aren’t selling quickly out of stock enables the purchasing department to arrange orders for those that do and thereby removing slow-moving products.
Provides information about supplemental costs:
Non-moving items take up the space which can be utilized for items that sell quickly. Also, long-term product storage along with maintenance charges for the products to remain in saleable condition can be expensive.
Along with these, an inventory aging report helps to understand how long the products are kept in stock. It lets you compare performance to industry benchmarks. Moreover, this report analyzes the costs of preserving the value of assets that are kept in storage read more..
