Inventory: Asset or Liability

Have you ever asked the question, "Is my inventory an asset or liability?"

Inventory technically is an asset to answer your question. Because you paid for the said inventory, there is value to it for your business and this constitutes it as an asset. Even the small office items and knickknacks not getting sold can be considered inventory depending on how you run your business. However, depending on the situation of your inventory, it can feel like a liability. Having too much or having a high attrition rate can devalue your inventory as an asset. With that said, you can mitigate attrition with a regular cycle-counts of your product and completing a complete store inventory every six months to a year. This will balance and give you a more enriching knowledge base of your inventory. Tune in next week to learn more about inventory attrition and how to mitigate it.

We at JP Virtual Consulting can help you get on the right track by helping you with setting up an effective inventory plan and execution of cycle-counts. Check out our inventory services here: https://jpvirtualconsulting.com/inventory

If you have any questions, please don’t hesitate to send us an email at jonathan@jpvirtualconsulting.com