For any business enterprise be it small-scale or a large entity, inventory management plays a major role in the profit graph of the business.
Be it a manufacturing unit, a trading enterprise or even a retail store, the inventory or the stock should be maintained well so that the owner has a clear idea about the flow of goods within the company.
Inventory reflects as the current asset in any company’s balance sheet as this equals to cash inflow, on being sold out.
Inventory management
Managing or controlling an inventory requires constant monitoring and this is more efficiently done using the MS software, MS Excel.
The process of inventory management involves three main aspects:
- Controlling the transfer of raw materials and finished products into and outside the Company, respectively.
- Calculating the buffer stock, so as to keep the Company running without interruption.
- Keep track of goods in progress- materials that go through the production process- so as to adjust the orders accepted.
Stock control using Excel
When the company is small, inventory management happens to be a not-much-complicated one. Whereas in large companies, the data-base itself is so large that computerized inventory management becomes inevitable.
In such an establishment, stock control and management needs to be done at different locations within a premise or within a single supply network.
Microsoft Excel provides the perfect platform for an in-depth inventory tracking record including all the elements like item of goods. Cost, percentage of total sales, per unit cost, sales price, sales percentage and such important information.
Such an inventory will help the managers of the company keep track of the finished goods, intake of raw materials and amount of buffer stock to be maintained so that the company’s production process goes unhindered, at the same time taking care not to have an excess stock, which will tell badly upon the fiscal graph of the company.
Meticulous inventory management precedes regular and planned course of manufacture, stock and supply of finished products.
Creating a stock list in Excel
Excel is a user-friendly tool and so complicated, even a novice who has only hands-on experience with the software can adapt easily to this software and use it to create a stock list.
But the person should have a sound understanding of the company’s products, manufacturing process, supply chain etc so as to create an all-inclusive excel sheet.
Step 1: Create Columns
Write down the number of columns that should be made in the spread sheet and accordingly create columns with the appropriate width using the mouse to drag the line between columns.
Step 2: Adjust column width
This can be done keeping in mind how much space each item on the column will occupy. Again the person making the sheet should have a good understanding of the goods handled in the company.
Step 3: Entering text
Now enter the title for the spreadsheet and the column headings. After entering click "Wrap Text" and align the column heading to center alignment.
Some of the headings need to be spread across more than one column, which can be done by merging the cells and pressing the "wrap text" button.
Step 4: Font highlight
The title and column headings should be highlighted in bold by selecting these titles and pressing the bold ‘B’ symbol on the tools above.
Step 5: Column highlight and shading
This is done to mark the important columns so that a quick look through the pertinent data is possible.
Step 6: Formulas
This is the main part of the worksheet which helps to arrive at a computed figure from the available data. Hence, care should be taken while formulating.
In the columns like unit price, sales price, sales percentage, sales rank, re-order amount and stock balance, apply the formulas and paste it along the entire length of the column so that it applies along the entire worksheet. For e.g.: Quantity to Order = Minimum stock-in-hand - quantity available
Conclusion
Now that the columns are ready, you can enter the data and the corresponding computed details will be made available in Excel.
The secret to a successful business is to maintain the necessary stock level to meet your sales.
This can be done by using the excel spreadsheet and evaluating the computed values over a period of time say a few weeks, so that the owner can arrive at a conclusion about the percentage of sales and quantity of stocks he should have.
