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As year-end draws near, many businesses will be not only be generating their fourth quarter financial statements, but also looking back on the entire year\u2019s financials. And what a year it\u2019s been. The COVID-19 pandemic and resulting economic fallout have likely affected your sales and expenses, and you\u2019ve probably noticed the impact on both. However, don\u2019t overlook the importance of inventory management and its impact on your financial statements.<\/p>\n
Cut back as necessary<\/strong><\/p>\n Carrying too much inventory can reflect poorly on a business as the value of surplus items drops throughout the year. In turn, your financial statements won\u2019t look as good as they could if they report a substantial amount of unsold goods.<\/p>\n Taking stock and perhaps cutting back on excess inventory reduces interest and storage costs. Doing so also improves your ability to detect fraud and theft. Yet another benefit is that, if you conduct inventory checks regularly, your processes should evolve over time \u2014 increasing your capacity to track what\u2019s in stock, what\u2019s selling and what\u2019s not.<\/p>\n One improvement to perhaps budget for here: upgraded inventory tracking and ordering software. Newer applications can help you better forecast demand, minimize overstocking, and share data with suppliers to improve accuracy and efficiency.<\/p>\n Make tough decisions<\/strong><\/p>\n If yours is a more service-oriented business, you can apply a similar approach. Check into whether you\u2019re \u201coverstocking\u201d on services that just aren\u2019t adding enough revenue to the bottom line anymore. Keeping infrastructure and, yes, even employees in place that aren\u2019t contributing to profitability is much like leaving items on the shelves that aren\u2019t selling.<\/p>\n Making improvements may require some tough calls. Sadly, this probably wouldn\u2019t be the first time you\u2019ve had to make difficult decisions in recent months. Many business owners have had to lay off or furlough employees and substantively alter how they deliver their products or services during the COVID-19 crisis.<\/p>\n You might have long-time customers to whom you provide certain services that just aren\u2019t profitable anymore. If your company might start losing money on these customers, you may have to discontinue the services and sacrifice their business.<\/p>\n You can ease difficult transitions like this by referring customers to another, reputable service provider. Meanwhile, your business should be looking to either find new service areas to generate revenue or expand existing services to more robust market segments.<\/p>\n Take a hard look<\/strong><\/p>\n As of this writing, the economy appears to be slowly recovering for most (though not all) industries. An environment like this means every dollar is precious and any type of waste or redundancy is even more dangerous.<\/p>\n Take a hard look at your approach to inventory management, or how you\u2019re managing the services you provide, to ensure you\u2019re in step with the times. We can help your business implement cost-effective inventory tracking processes, as well as assist you in gaining key insights from your financial statements.<\/p>\n \u00a9 2020<\/em><\/p>\n <\/body> As year-end draws near, many businesses will be not only be generating their fourth quarter financial statements, but also looking back on the entire year\u2019s financials. And what a year it\u2019s been. The COVID-19 pandemic and resulting economic fallout have likely affected your sales and expenses, and you\u2019ve probably noticed the impact on both. However, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,10,32],"tags":[8,23,11],"class_list":["post-15083","post","type-post","status-publish","format-standard","hentry","category-business","category-news","category-tax","tag-articles","tag-business","tag-news"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=15083"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15083\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=15083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=15083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=15083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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