You are one of those who lose several tons of raw material every month. Of those who, when reporting the information, have to make important adjustments in the financial statements of the company as a result of the deviations in your inventories? Do you know how much money has been lost due to these practices without knowing the origin of the missing and putting your permanence in the company at risk? Have you ever wondered what the main factors influencing this variation and its risks are?
Learn more about how technology can help you make an accurate physical inventory count.
To calculate inventory value, we can find the inventory purchases register and register each number in a balance sheet. Still, this solution could be more efficient for calculating a large company's ending inventory.
How is calculating ending inventory a better way? We can support our inventory records with inventory management software to calculate the inventory turnover for grains and perishable food or take an estimated count of our physical inventory counts.
The inventory counting process must be at most the cost of goods sold, so we must always look for the best physical inventory count process techniques to have clear inventory data.
By having a well-calculated beginning inventory with a recurring accounting period, we can be sure that our business and its inventory levels and inventory turnover will always be adequate to meet customer demand.
A weighted average method can work, but the factors presented below must be considered to carry out a correct count of an inventory.
Some of the most important factors are:
Bathroom scales are one of the factors over which we have greater control since, with correct maintenance and calibration by the supplier or the instrumentation area, we can maintain an exact measurement of the inputs and outputs of material.
Another factor that can influence the issue of scales is the correct measurement and registration of cargo vehicles with their tare or empty box before being loaded.
Humidity is the most difficult factor to measure due to the changes in its condition over time influenced by the type of storage and the temperature.
Moisture refers to the amount of water inside the material in the void spaces of the mound.
Humidity can vary due to temperatures and storage conditions, whether in warehouses, silos, bunkers or outdoors.
Most of the time, materials with higher humidity are received that lose it as time goes by and depending on their storage method, they lose it faster in some than in others.
Volume is the most important factor that has affected inventory measurements for many years. Still, thanks to the evolution of technology, the uncertainty that this can throw has been almost eliminated.
Traditional methods such as tape measure, EDM, or total station are accurate when measuring punctually. Still, more information is needed due to the organic shapes in the material's arrangement.
Solutions such as 3D laser scanning capture thousands or millions of measurements producing a point cloud that faithfully represents the complex shapes of the material.
Since thousands of measurements would have to be made, that, in turn, form a point cloud to represent those shapes and obtain a precise calculation of the volumes.
Compaction of the material
Compaction, this factor refers to the level or the ratio of voids existing in the different levels of the material measured from its floor to the top, being proportional to the column of material that they have above, that is, the material below has a lower void ratio than the one above since the column of material is larger and the material compacts more, which causes a variation in volume and air space at different levels.
Remember to consider these factors the next month you will measure your inventories and, most importantly, be consistent and systematic in your measurements. You will see that each time you cubed, your deviations will decrease, reflecting more realistic financial statements.