Raw materials taken from natural conditions, before getting in the form of a finished product to the final consumer, is subjected to various types of processing. It is moved, combined with other materials. Moving along the chain, the raw materials are delayed from time to time, waiting for the stage of entry into the next stage of the life cycle.
What is inventory?
This is a product that is at various stages of the life cycle. It consists of various goods that are waiting in line for entry into the process of individual or workshop consumption. If the chain of participants involved in the transformation of primary raw materials into finished products and their promotion functioned as a single conveyor, downtime could be substantially minimized. But in reality, it is impossible to do without waiting.
Expenses
Inventories are objects whose creation involves certain costs. Among the main types of costs associated with this, it can be noted:
- Frozen funds.
- The cost of maintaining premises specially equipped for processing raw materials.
- Salary of employees of the enterprise.
- Constant risk of theft, damage.
The company always incurs costs, creating a material stock. This, however, does not mean that a lack of raw materials will be profitable. It is necessary, otherwise the company will suffer losses. The main losses incurred by the organization in the case when there is no material stock are the costs of:
- Idle equipment.
- Lack of finished goods in warehouses when there is a demand for it.
- Purchase of small batches of products at a higher cost.
Despite the fact that the formation of the raw material base is always associated with costs, enterprises are forced to create it. If the organization does not have inventory, this will lead to even greater losses.
Relevance of the problem
There are several reasons why inventory is created. It:
- The probability of fluctuations in demand. In particular, we are talking about an unpredictable decrease in the intensity of the outgoing material flow. Demand for products is variable. His fluctuations are far from always predictable. In this regard, if the supply of material means is insufficient, the company may be unable to satisfy solvent demand. In other words, the company runs the risk of being left without products on the counter and releasing customers without purchases.
- Seasonal changes in demand for a number of goods. As a rule, this situation is typical for agricultural products. For example, a potato crop is harvested in early autumn. Meanwhile, this product goes through the distribution chain year-round. Accordingly, at some stage, material stock should be formed . This is possible due to discounts on the purchase of large batches of products. Actually, for this reason, many citizens keep a relatively large amount of food at home.
- Speculation. The cost of some goods may increase significantly. A company that can predict this leap will create inventory. This will subsequently make a profit when the value of the goods changes.
Benefits of MPZ
An industrial organization (PO) should manage its inventories competently, and prevent them from being wasted. The presence of MPZ allows you to immediately serve consumers. There are several ways to complete a customer order:
- Create the right product.
- Purchase a product from another company.
- Provide the product immediately from those in stock.
The latter option is considered the most expensive. This is due to the cost of maintaining stocks. Nevertheless, often in a competitive environment, the ability to immediately satisfy a buyer's need can be decisive in the market struggle. Equally important is the availability of spare parts for equipment in the warehouses of the enterprise. Damage to machines can lead to long downtime of production lines. This is a very big problem, especially for those enterprises where the process is ongoing. Stopping production will be quite expensive. In this regard, it is advisable to keep a certain stock of parts and mechanisms with which you can quickly replace items that fail. The presence of MPZ greatly simplifies enterprise management. In particular, this refers to the creation of stocks of semi-finished products at different stages of the process inside the workshops. Their presence can reduce the requirements for the level of coordination of operations in various sectors. Accordingly, the costs of managing production processes are also reduced.
Documenting
All operations conducted by the enterprise must be supported by paper. Primary documentation is used for accounting. It must be properly drawn up, have all the required details, signatures of responsible employees. Accepting the material resources of the institution, the warehouse manager checks the compliance of the actual number of objects with the information of supporting documents provided by the supplier. In the absence of discrepancies, a receipt order is issued. It is made up in one copy. If a discrepancy is revealed (re-grading, surplus, shortage), there will be no accompanying documents, the act f. M-71. This document is generated in 2 copies. It acts as a receipt order and the basis for clarifying settlements with the supplier.
Inventory Accounting
All primary documentation is subject to control by responsible employees. The responsibilities of accounting include the control of legality, expediency, and the correctness of registration of operations on the movement of the MPZ. After verification, the primary documentation is taxed, that is, the amount of raw materials is multiplied by the cost. In practice, several methods of accounting for MPZ are used.
Information reflection options
Information from the primary documentation is entered in special cards. They can be opened for each variety and type, in accordance with the volume of reception and expenditure of values. The difference between these cards from warehouse documents is that indicators are reflected not only in kind, but also in monetary value. At the end of the month, on the basis of the information, quantitative-total, varietal, negotiable analytical statements are formed. Information from them is verified with the indicators of the corresponding synthetic accounts and information of warehouse cards. Another accounting method is the grouping of all receipts and expenditures by item numbers. At the end of the month, responsible employees carry out the calculation and record the results on the admission and expenditure of each type of MPZ in the current statements. The information is reflected in them in physical and monetary terms for each warehouse separately, for synthetic accounts and sub-accounts opened to them. This method significantly reduces the complexity of the process. In this case, the need to fill out analytical cards is excluded.
Balance method
This method of accounting is considered more progressive. In this case, varietal warehouse indicators are not duplicated either in separate analytical cards or in turnover sheets. The registers are documents that are kept in warehouses. Every day, or at other specified deadlines, the accountant checks the correctness of the records made by the storekeeper and confirms them with his signature. At the end of the month, the warehouse manager, and in some cases the controlling employee, transfers quantitative indicators of balances to the first day of the period for each item from the warehouse card to the balance sheet (without income, turnover and expense). After verification and confirmation by signature, it is transferred to the accounting department. Here, the MPZ balances are fixed at fixed prices and their results are displayed for individual groups and for the entire warehouse as a whole.
Disposal of the plant
Write-off of inventories may be carried out at the average actual cost of a group of objects or unit of property. Enterprises are entitled to use both of these methods. However, the method provided for the MPZ group is used continuously throughout the year. The procedure established for determining the value of values throughout the reporting period remains unchanged. At the actual price of each unit, precious metals, stones and other non-interchangeable objects are written off.
Important point
When writing off the MPZ, special attention should be paid to design. The natural loss of property is shown in accounting on the basis of acts drawn up in the prescribed manner. The disposal of valuables due to theft, losses, shortages is also reflected in accordance with the documents. At the same time, the sums to be exacted are brought to the perpetrators. Municipal and state organizations use the act of writing off inventories to reflect information. This document acts as the basis for making entries in reports on the disposal of values from accounts.