The digital revolution continues to penetrate into all parts of business operations and accounting isn’t spared from the takeover. And that’s a good thing, given that accounting software provides so many benefits to a company. It helps achieve better efficiency, productivity, data security, and many other adjacent benefits. All these things point to one overall outcome – the ease of doing business.

It’s no wonder why accounting software markets will surpass
$416 million by 2024. There is now a majority adaptation across the accounting practice and it’s likely that companies will follow suit and roll out accounting software. If you’re looking to launch or implement an accounting software in your business, here are a few tips to help you do that well.

Tip #1. Select the right software for your context

When learning how to implement new accounting software, the first step will be to choose and learn how to use the right solution for your organization. There are many choices available today and all of them have their own unique strengths and weaknesses.

The temptation is to jump between one software to another, but it always works to a business’ advantage to have one solution for all your finance and accounting needs. If you do need to use multiple solutions, try to limit the number to avoid confusion and higher learning curves or find a way to integrate them all into one solution. Another thing to consider is your budget so that you can factor it into your business expenses.

Tip #2. Roll out in phases

Slow is fast is how the mantra goes and the same is true for software roll-out. It’s always important to get things done as fast as possible, but they also have to be done right. To ensure that all things go well, it’s best to roll your accounting system out in phases. Start with the department most directly influenced by the system-your accounting and finance department.

Eventually, you can then roll out to other departments. Teach your staff how to use the features that matter to them most. Collection officers will need
billing software, accountants will need bookkeeping services, and all staff will need to learn how to turn in expense reports digitally.

Tip #3. Aim for company-wide use

Up to
94% of accountants have now implemented cloud accounting, so it’s safe to say that experts approve. But the buck shouldn’t stop with the accountants. All business operations have to do with money and finance management. Marketing departments will need to manage money just as customer service, sales, operations, creative, human resources, and all other departments will have to.

What companies need to avoid when rolling out software is having a silo that would rather stick to the “old ways” of doing finance. There are also some things to consider when changing accounting software, such as inertia from people who might have liked the old software better. Get the whole company on the same page by having someone or a group of people champion the rollout, which leads to the next tip.

Tip #4. Create a rollout committee

Think of your accounting software as a product you need to market internally. You’re going to need a “sales” team to vision cast the importance of successfully rolling out a new system. Talk about how the
accounting software can help with business growth and help staff stay efficient. Experiencing challenges with the learning curve is normal and should be expected, but you’ll need a team to motivate staff to keep using the software consistently.

The roll-out committee will also be in charge of the accounting system implementation checklist, and keep track of roll-out progress. For the first few months, it helps to ask them to give weekly or bi-monthly reports on software usage. Thankfully, many if not all accounting software provide analytics automatically so the roll-out team won’t have to create reports from scratch.

Tip #5. Provide support to your staff

Again, the learning curve is one of the most important factors to consider when choosing accounting software. So on top of choosing software that suits your team best, make sure to leave all grounds covered and provide support to your staff. Consider getting an online course that teaches people how to use certain accounting software and all the use-case scenarios.

Also, look into external factors that could affect accounting software use such as whether
e-invoices are GST compliant and help staff create the right parameters to follow such government policies. When in doubt, work with an expert who already has a background in using the app or tool so your roll-out team doesn’t have to figure things out on their own.

Accounting in The Cloud is Now the Norm

For professionals who ask “
what can you do with an accounting degree?,” it’s hard to imagine any application that doesn’t have a technology aspect to it. Digital tools are going to be a part of accounting and finance as a practice. That’s inevitable. So if you’re an accountant, finance officer, or bookkeeper, take the time to master online tools. They’re here to stay.

Most of the time, business owners believe they do not require having a fixed asset register software because they think they can count assets at their fingertips. However, they forget that when the business grows, business assets keep on adding regularly and hence it gets challenging to track and manage them orally. There was a dire need for business owners to implement a fixed asset register software, and we have a solution. But first, let us learn more about fixed assets.

What are fixed assets?

Fixed assets, also known as capital assets, are a kind of asset that assists the organisation in creating income. It comprises assets such as machinery, vehicles, manufacturing tools and many more. Also, these Fixed assets get purchased for the long term and do not readily get converted into cash.

Challenges in managing fixed assets

To keep your business operations running successfully, you must invest in the best tools and use them effectively. Because, with poor fixed asset management, your employees will get confused, and you will see a decline in their productivity.

This will undoubtedly lead to reduced profits. Hence, it is essential to have a well-organised fixed asset management plan to streamline your business operations. Mentioned below are a few challenges businesses face due to poor fixed-asset management.

• Massive paperwork: Businesses that employ hand-operated methods to store data find it difficult to keep track of their fixed assets, and they always remain engrossed in a tremendous paper trail.

• Extended downtime: Poor asset management methods intend not registering fixed assets for routine maintenance. This leads to increased asset downtime and reduced productivity.

• Discrepant records: Lack of a fixed asset record system builds confusion. Also, employees may enter duplicate data in separate files or even omit some data.

• Stock inequality: With manual systems, it is tough to track utilization patterns for assets. This can negatively affect demand forecasting and end in inadequate stock levels.

Increase your business’ overall performance with a fixed asset software

Mentioned below are some ways how a fixed asset register software helps you improve your asset management process.

• Recorded check-ins and checkouts enable stringent vigilance of assets

It is a standard fashion in every business to manually track assets records check-in or checkout. However, if the asset records do not get checked out accurately, there are higher odds of assets getting stolen or lost.

With the help of online fixed asset software, you can effortlessly manage asset check-in and checkout details to manage your assets safely.

• Barcodes enable businesses to track asset location

Retail businesses administer thousands of fixed assets, and hence it is essential to track the location of these assets. This is why companies use barcode labels to streamline this process. Fixed asset software enables you to generate barcode labels for your fixed assets and keep a close track of your barcodes.

• Lifecycle management assists in keeping tabs on depreciation

Fixed assets depreciate with time, and with the help of
fixed asset management software, you can keep a tab on the asset depreciation.

• Recurring services help decrease machine downtime

Fixed assets register the software to enable you to schedule future maintenance of your assets to decrease their downtime and keep it running without any glitches.

• Availability overview of assets limits colliding reservations

Precious capital goods are usually limited, and due to the unavailability of the fixed assets, you may get forced to cancel or suspend business transactions. Fixed asset software allows you access to a calendar and reveals the prevailing status of all your items to avoid last-minute hassles.

• Regular audits ensure compliance

Asset audit is a fundamental business operation. A fixed asset management software allows you to perform an asset audit regularly to sustain the credibility of your business at all times.

Choose the most competent fixed asset management software for an all-round view of your assets

Fixed assets make a substantial portion of your business’s capital investments, and hence it must get closely monitored.

If you are looking for comprehensive
fixed assets register software, Ankpal is your one-stop solution. To know more about this software, call us now at 63588 58915.

GST in India was introduced as a powerful and efficient way to impose taxes on exporters or manufacturers. This not only incorporates an effective way to levy taxes, but it additionally possesses a better flow of receiving GST refunds when a taxpayer gets imposed an excess amount.

The current GST tax composition enables its users to receive their GST refunds quickly by enabling well-organised inspection of the GST imposed on the person or the entity. Also, this processing of up-to-date GST refunds will benefit businesses and expedite trade through the discharge of blocked working capital and readily get managed with the help of GST accounting software.

How to claim GST refund?

You should always remain familiar with who can claim a refund in GST. Mentioned below are the most common rules to claim a GST refund:

• Tax paid on inward supply of services or goods shipped or on inputs or input aids employed in services or goods exported. However, if the goods are subject to export duty, you cannot claim a refund.
• Unused ITC of output being zero-rated supplies or exports.
• Unused input tax credit due to reversed tax structure as the tax rate on inputs is more than the tax levied on manufacturing supplies.

GST refund process

The GST refund process must get carried out within two years from the relevant date discussed above. Also, this ‘relevant date’ in the GST refund process differs in different scenarios mentioned below.

• Goods shipped by sea or air – Date on which the vessel or aeroplane in which the goods get placed leaves India
• Goods transported by land – Date on which the goods cross the country.
• Goods consigned by post – Dispatch day of goods by the concerned post office.
• Services transported, where the service supply is complete before the payment release – Day when the payment arrives.
• Services exported, where the payment was received in advance, before the date of issuance of invoice – Date of invoice issue.

Applications for GST refund claims

Once you are eligible to file a claim for a GST refund, you can make a refund claim application by filing a GST Refund Form
RFD-01. You can claim the GST refund within two years of the relevant date after filing the refund application. However, if you fail to file a refund claim with the stipulated timeline, your credits can get blocked forever, and you might never receive the GST refunds.

In addition, if there are any inconsistencies in the refund claim process, a
GST-RFD-03 form will get auto-generated and transmitted to the taxpayer for revisions in the application form, post which the refund amount will get transferred to your account.

Order for GST refund claims

If the GST refund is on behalf of the export of services or goods, the appointed officer will reimburse 90% of the cumulative amount claimed as a
refund in Form GST RFD-4. After due verification of the records supplied, the officer will pass an order for the ultimate settlement of the refund claim. Also, if the commissioning officer gets convinced that the complete or part of the refund amount claimed in the application is refundable, he will pass an order for the payment refund in Form GST RFD-5.

Exceptional scenarios of GST refund claims

Listed hereunder are a few exceptional scenarios of GST refund.

• Tax on supply of goods considered as deemed exports such as exports in SEZ.
• Tax is refundable as an outcome of a decree, judgement or on the command of an Appellate Tribunal.
• Tax incorrectly accumulated and collected with the Central or State Government.

To claim your GST refunds, you must follow a poignant GST refund process as the government will not provide a refund without a careful examination. Hence, always ensure keeping all your GST records well-organised by employing the
best GST billing software that can help you easily furnish all the required records at the time of claiming a GST refund.

The notion of reconciliation is not unusual to taxpayers as it was widespread before the advent of the GST regime too. However, this concept gained unprecedented popularity after the GST Law in India as it enables businesses to ensure that no sales or purchases entry goes missing or gets wrongly reported when filing the GST returns.

GST reconciliation includes equalling purchases and sales data employing various GST returns and purchase and sales registers using a manual calculation or GST accounting software.

What is meant by GST reconciliation?

In general, a reconciliation implies analysing two data entries to distinguish any discrepancies or variations. However, GST reconciliation is a means that helps taxpayers to understand the disparity between their financial statements and GST returns.

Moreover, with the aid of GST reconciliation, you can amend the variations either by interacting with the supplier or making modifications to your accounting records. Apart from this, you should conduct the GST reconciliation process at every fixed interval to avoid any financial penalties that arise due to mismatch in your financial statements.

Types of GST reconciliation

Mentioned hereunder is a list of the most popular types of GST Reconciliation that you should take into account while filing your GST Return:

• GSTR2A and Inward supplies Reconciliation
• GSTR 2A and GSTR 3B Reconciliation (Input Tax Credit)
• GSTR 1 and GSTR 3B Reconciliation to understand discrepancies in sales data.

Any deviations marked between these GST returns can point to a show-cause intimation from the GST authorities.

Mismatches under GST reconciliation

Listed below are some significant mismatches that you may find during your GST Reconciliation.

• Discrepancies in bill details

There can be numerous errors in the provided information between you and your vendor. Also, some fundamental invoice data mismatches include the incorrect bill number, bill date or/and invoice price.

• Discrepancy in GSTIN

Mismatch in GSTIN is the most common discrepancy while carrying out GST Reconciliation. On the off-chance, due to a manual error, the supplier enters the wrong GSTIN. A situation like this will create a problem while claiming ITC. Hence, to overcome this discrepancy, you should employ online GST accounting software.

Why is GST reconciliation important?

GST reconciliation plays a significant role for your business due to various reasons. Firstly, GST reconciliation is essential in claiming 100% correct Input Tax Credit as it helps eliminate all the discrepancies between the GSTR 2A and purchase register. Also, GST reconciliation is beneficial in raising invoice issues with the supplier to fill errorless GST return.

How to do GST reconciliation?

Follow the below-mentioned steps to conduct GST reconciliation effectively:

• Start by reconciling within the GSTIN accurately.
• Next, reconcile the data provided to the PAN India level.
• Afterwards, perform the supplier-wise GST Reconciliation to get any unclaimed ITC.

What are the common challenges faced during GST reconciliation?

One of the significant challenges faced during GST reconciliation is that the people involved hold different methods for their bill numbers. This can make it more difficult for the implementation system to obtain an accurate match of the invoice number. Major issues faced during GST reconciliation are:

• The bill numbers employed by the buyer to register transactions do not match with the seller’s invoices collected in GSTR-2A.
• The buyer carries out business in various states, and the seller has raised the invoice utilising another GSTIN instead of the original buyer GSTIN.
• Both the purchaser and supplier hold registered invoices in separate GST return periods.

To sum up, we can say that GST Reconciliation plays a vital part in keeping your business on track. While it is easy for you to reconcile limited data, it can become challenging to match thousands of entries without proper GST accounting software in place. Hence to make your GST reconciliation seamless, opt for cloud-based accounting software from Ankpal today.

Managing personal accounts and handling income and expenses is a significant yet confusing and exhausting task due to the frequent reforms and changes in tax laws. In India, GST (Goods and Service Tax) is followed for the same, which came into effect on 1st July 2017.

The article outlines the tax reforms that have been introduced in recent years and enlists the reasons as to how they directly affect one’s income bifurcation in terms of TDS or Tax Deducted at Source.

New TDS Section 194Q

The recent budget has proposed certain changes that are expected to impact every business operating in India drastically. The changes pertain to TDS on Purchase Transactions.

One needs to be updated with the latest but significant changes in all commercial and business laws. Such crucial changes wrt TDS on Purchase Transactions will be in effect on 1st July 2021, as proposed by Honorable Finance Minister Ms. Nirmala Sitharaman in her budget speech.

Key Elements of TDS Section 194Q

Section 194Q is proposed to be applicable from 1st July 2021 for business transactions:

• All Purchase Transactions are proposed to be subject to TDS provisions.
• Such a transaction can be effective with TDS and will have to be deducted at 0.1% of the purchase transaction or payment thereof, whichever is earlier.
• The applicability of this section will also extend to an assessee whose aggregate turnover in the immediate previous year exceeds ten crores.

Applicability

The new section 194Q is going to be applicable from 1st July 2021.

TDS Rate

Under section 194Q, Tax Deducted at Source (TDS) shall be applicable at 0.1% on aggregate purchases over and above 50 lakhs from a supplier in India in a financial year.

When to Deduct?

When the value or aggregate of purchases from a supplier or payment, whichever is earlier, exceeds Rs.50 lakhs during the previous year, the provision will be effective as TDS will have to be deducted at 0.1% of the Purchase Transaction or payment.

Who should Deduct?

The buyer is responsible for making payment to a resident to purchase goods when the value of purchases from a supplier exceeds 50 lakhs during the previous year. The Purchaser, hence, is responsible for deducting TDS as applicable.

Consequences of non-deduction by the Purchaser

If the Purchaser fails to comply with the provision to deduct TDS as applicable, Section 40A(IA) provides that the value of such Purchase Transactions will be subject to 30% disallowance.

How can cloud-based TDS accounting software help?

Cloud-based accounting software provides a digital platform and end-to-end financial services such as bookkeeping, GST, tax filing, Company Law, FDI, TDS return filing, etc. Try Ankpal.

It is the best cloud-based TDS software that offers absolute security for your data and provides convenience in every step.

Clarifications

• If there is a transaction under any other section of the Income Tax Act, other than TCS collected under section 206 C (1H) of the Act, TDS is not required to be deducted on that particular transaction.
• However, if TDS is required to be deducted under this section, then the same Transaction TCS on sales will not be Collected by Sell.
• TDS on a Gross amount involves cash flow reductions.

Example

Mr. Z Turnover in FY 20-21 is more than 10Cr. His purchase from Mr. A till 30.06.2021 is Rs 45 L. No on 07.07.2021 He Purchases goods Rs 7 L from Mr. A. Mr. Z is required to deduct TDS on that purchase of Rs 7 L only.

Ankpal can make your TDS filing faster and streamlined. Make use of the opportunities available and choose the best accounting software.

For more info, call at 63588 58915 and get started with the 30 days free trial of your TDS return filing software today!

Forex Accounting is the term given to Foreign Exchange Accounting that refers to the process of recording the transactions between different currencies. The transactions are recorded in the functional currency as per the exchange rate at the date of completion of a transaction.

With the rapid development in the IT sector, there has been an accelerated change observed in the structure of global and domestic forex markets. Liberalization and the development of currency and forex derivatives have even pushed the RBI to revise its policy of Internal Control Over Foreign Exchange Business.

Forex accounting is carried out through a dealing department which includes dealers, mid, and back-office staff. The staff is responsible for following and tracking the deals made by dealers in foreign currencies.

Forex Accounting and Compliances in India

During a foreign currency exchange, the dealers need to observe the compliances followed in India. RBI lays down these regulatory requirements. According to the regulations, the dealers need information about the transaction in written form.

For any sector, one needs to follow the accounting standards for all foreign currency income and expenditure. It includes a reevaluation of outstanding liabilities and assets in foreign currency.

Forex Accounting and IT industry

As India grows to become an IT hub, the services provided by the IT industry are continuously enhancing the foreign currency inflow in India.

As with other sectors, forex accounting is an essential aspect of accounting in the IT industry to understand its finances better and streamline the expenses.

With sole trader accounting software such as Ankpal, one can ensure that the invoices of their IT company are maintained. Along with it, the sales report provided by the software can ensure that one keeps track of the receivables.

Forex Accounting: Online Course

Forex accounting is a highly specialized function that needs proper training and an immense knowledge base about the respective industry.

The online course offered at Ankpal, a leading trading accounting software in India, provides a practical outlook. The program has been initiated to provide practical and accurate guidance so that the learners can determine functional currency along with understanding the principles and reporting transactions that involve changes in foreign exchange rates.

The course will guide the learners through the step-by-step method of preparing the cash flow statement that involves foreign exchange and handling foreign exchange derivatives. Along with that, it will also detail the effect of hyperinflationary effects on foreign exchange operations.

The trainer employs various case studies and real-life examples to illustrate the issues and clear the doubts arising in foreign exchange accounting and resolve them.

The course is offered in three formats:

Basic (free)

Intermediate

Advanced

The learners can avail numerous videos that detail the course outline for free under the basic plan. For an in-depth and complete course outline, one will have to buy the intermediate or advanced plan.

The outline of the course is as follows:

Introduction to the effects of changes that occur in foreign exchange rates.

Accounting the differences that occur in the foreign exchange rate in a company’s financial statement.

Difference between the functional and presentation currency of the entity.

The impact of foreign exchange differences on business combinations and fair value adjustments.

Translation of functional currency of a subsidiary in different forms of presentation currency of the group.

Accounting the difference in foreign exchange that is caused by the net investment in foreign subsidiaries.

Statement of cash flow and effect of foreign exchange on it.

Foreign exchange derivatives and their accounting.

Foreign currency risk disclosure and disclosure requirements.  

Contact us at 6358858915 or visit our website and start your 30 days free trial today.

GST came into existence in 2017, and since then, many businesses have found the right way to comply with GST regulations. However, there are pockets of businesses that are confused about the GST regulations, registration, etc. Fret not! Here’s everything you need to know to make your business GST compliant.

Filing GST returns

Businesses are required to register under GST if their yearly turnover is more than ten lakhs in the special category states and forty lakhs in other states. Essentially, a regular business will have to file for GST returns. The company has to file one annual and two monthly returns. Non-compliance can lead to severe penalties and a lot of hassle. An efficient online GST accounting software can ensure a seamless experience when filing GST returns.

Classifying transactions

Transactions under the jurisdiction of GST must be classified as goods or services. GST laws classify transactions differently compared to the previous VAT laws, and utmost care should be taken to correctly classify all transactions using HSN/SAC code mapping. Classifications are also based on whether the transaction occurred interstate or intrastate.

Raising invoices under GST

The registered business issues invoices under GST. While suppliers can pick the format that works best for them, the invoice itself must have sixteen mandatory fields. The next step is to update the invoice details on the GSTN portal without fail. An
online GST accounting software can help a great deal in raising invoices and filing returns.

Are you liable to compulsorily register under GST?

Existing business owners have already registered under GST. However, if you’re starting something new and your business meets any of these conditions, you need a GST registration, especially if your turnover crosses Rs. 40 L:

1. Interstate suppliers
2. If you deduct TDS/TCS
3. Casual taxable persons
4. If you are taxable under the reverse change criterion
5. E-commerce operators who offer dealing space to suppliers
6. If you supply via e-commerce operators
7. The principal or the agent making sales indirectly
8. If you are a non-resident taxable person
9. Distributor in the input service
10. Overseas e-service providers providing services to Indian citizens
11. Your turnover exceeds 40 lakhs INR

Get GST registered

As a new business owner, you can get GST registered through the official portal, which has a simple interface and is easy to navigate. You’ll have to validate your contact details. After enrolment, you will receive Form GST REG-25. If you are a supplier for multiple states, you must get GST registered separately in all the states.

Check the impact of GST

Getting registered under GST is bound to have a disruptive impact initially. All the nodes in your network, like your vendors or suppliers, must be aware of the GST registration to implement compliance.

You cannot keep using your old ERP software

After your business is GST-registered, you will have to move to an ERP system compliant and cooperative with the new changes.

Learn from the practices of other countries

When you learn more about similar regulations in other nations and how businesses worldwide cope with them, you will learn how to optimize your systems. Learn from other nations to improve, adapt, and overcome the impact of any changes.

Check up on your IT and accounting systems

Your IT and accounting systems must have needed an upgrade when you first included GST accounting software. Since it’s been a while, it’s time to evaluate how well your IT systems are working in coordination with the software. As time progresses, the technology we use must also become faster and more efficient to cope with a dynamic world. A robust
GST billing software for small businesses can make a huge difference.

GST guidelines must be followed, as is the norm. It’s best to keep a check on changing tax guidelines so you never fall behind. Having efficient online GST accounting software on your side can improve efficiency by a large margin.

Accounting has always been one of the essential parts of running a business, be it large or small. To help manage this, accounting software was introduced. Most online accounting software acts as a ledger that consolidates the records and process of all accounting transactions under one roof. As good as that sounds, does it aid in business growth?

Here are 10 ways accounting software helps do just that.

Performance analysis

Without having your business first analyzed, creating a good management policy is impossible. Depending on the financial records that have been accumulated, a person can check to see where money was spent and how advantageous were certain investments in the long run.

Saves time

Accounting software, especially cloud-based accounting software, helps in reducing any extra costs that may be incurred and saves time which can be used for something else. This is because accounting software not only helps businesses track their financial data but also helps in managing their credit notes and even invoices.

Law compliances

Any account that has been kept in a systematic order is only beneficial to a business. In some cases, it could help them overcome any unexpected changes made in taxations or legal compliances. Though as an accountant may be aware, owning good accounting software would come with updated taxation settings.

Financial updates

It isn’t easy to remember details that are related to the financial world. This is mainly because there is too much to remember, and more only gets added as the days go by. With the help of online accounting software, these details get accumulated and added on for handy reference.

Creating budgets for managing operations

With the help of cloud-based accounting software, it is easy for any business to create a good budgeting system without any issues. A good business always ensures that a balanced budget is made in case of any emergency expenses that arise or even for future revenues.

Reduced overall costs

Accounting software and overall cost reduction are always linked. This is because the software is basically doing the job of three or four people. With this, any extra costs that would initially go towards administration and even payroll are significantly reduced.

Manages cash flow

Problems that are related to cash flow are often seen as one of the biggest issues that businesses face. The use of online accounting software helps the business come up with new ways to combat the issue of cash flow.

Increase efficiency

Due to its ability to manage any and all accounts transactions, accounting software helps increase the efficiency of a business as all the necessary information is in one place. As accounting calculations are often difficult, this software ensures they are made with no hassle.

Security and protection

The financial data of any company is considered to be it’s the holy grail. That means it cannot fall into the wrong hands. Cloud-based accounting software acts as a safeguard that protects this data. This way, the data is safe, and an extra copy is made available whenever required.

Maintaining customer relationships

In the financial world, the relationship any firm has with its clients is extremely important. With accounting software, any delays and mishaps that could have happened can be avoided. This increases business reputation and credibility.

In many cases, the financial world is something that keeps changing. More often than not, it is difficult to keep up with them. However, online accounting software helps reduce the burden in certain situations, giving a business enough breathing room to focus on other areas that could potentially lead to immense growth.

8 Effective Inventory Management Techniques for 2021

Inventory is a crucial aspect of a business that involves purchasing, producing, and selling goods. It is essential to regulate and keep a check on the inventory for a profitable business experience. Both small-scale and large-scale companies can profit from keeping a check on the inventory. Inventory control software helps in growing businesses by focusing on stored items for production.

What is inventory management?

Inventory management is a technique by which businesses can keep track of the inwards and outwards stock-flow in their warehouses. It lets the companies plan their sales and purchase according to the inventory stock quantities. It is a systematized approach to manage raw materials, tools, finished goods, and unfinished goods in the inventory.

How does inventory management work?

Inventory management keeps a check on the stocks when it moves from the suppliers to the company warehouses and finally to the customers. It ensures efficient use of the items and helps plan future sales. It also helps in controlling the demand and supply chain of the business. A good inventory control software helps keep a record of the inventory systematically. It tracks the availability of the stock for its optimal usage.

Why is inventory management important?

Manual stock accounting can be stressful and can create confusion. Inventory management is less time-consuming and helps maintain a smooth flow of work without any misinterpretations. It improves consistency and increases customer satisfaction. It automates the workflow and provides detailed reports of the stocks such that the company is not out of stock or overstocked. Software companies like Ankpal offer the
best inventory management software that helps your company grow with reliable services.

Inventory is one of the most valuable and largest assets for businesses. Inventory management software provides financial aid to the companies as it keeps a check on the cost of buying, producing, maintaining, and selling the goods during the accounting period. It also manages to identify and track the expired products, and the items returned to the inventory. It enhances value management and reduces the chances of misinterpreting item quantity.

Common inventory management techniques for 2021

It is vital to track the stocks for the smooth functioning of your business. Many popular innovative techniques of inventory management can improve the flow of capital and regulate company sales. Some of the methods are listed below.

• Just-in-time (JIT) inventory

JIT inventory, as the name suggests, means keeping only that much stock in the storage as is needed for production.

• ABC inventory analysis

This technique divides the inventory items into value-based categories A, B, and C that makes it easier to track them.

• Dropshipping

In this technique, the companies outsource the products from a third party. The requirement of the warehouse gets reduced as they don’t take it from their inventory.

• Lean manufacturing

This technique aims to reduce the waste during manufacturing and increase the cost accounting to the customer needs.

• Batch tracking

Batch tracking is a technique used to keep a check on the set of goods produced together. It gives a prompt about the expiration of a particular batch of products, allowing businesses to avoid losses and plan sales.

• Safety stock inventory

In this technique, the extra stock gets purchased as a safety measure to cope with the misinterpreted forecast or change in demand.

• Economic order quantity (EOQ)

EOQ technique uses a formula to ensure the purchase of the right number of stocks required for the productions.

• Minimum order quantity (MOQ)

MOQ is the calculated minimum quantity of inventory stock required to purchase at one time for producing an item.

Five key stages of inventory management

• Purchasing: Raw materials get purchased for production.
• Production: Manufacturing of final products.
• Holding stock: Storing raw materials and finished goods.
• Sales: Selling the products in exchange for payments.
• Reporting: Recording the profits and quantity sold.

Efficient inventory management techniques adopted by businesses help them track their unfinished and finished items. The best inventory management software helps to control the expenses, which can increase the profit margin and leave businesses with enough capital to expand their business. Furthermore, with an efficient inventory system, enterprises can also meet client deadlines and make their customers happy with their service.