For many greenhouse and retail operations, poor inventory practices lead to lost opportunities, higher costs, and degraded business performance. It also implicitly invites your customers to shop elsewhere.
There are many ways for a producer to manage their inventory to achieve better business results. One of the most effective, albeit rigorous, ways is to use a perpetual inventory system.
Perpetual inventory is an accounting method in which all transactions that impact inventory are recorded in a general ledger or software system. Tracking all transactions like this in a ledger allows a business to keep very detailed and up-to-date records of its inventory status.
For producers, this means recording the receipt and consumption of raw materials, recording the production of finished goods (or bumps), and recording the sale or disposal of those finished goods, at the very least.
When using a perpetual inventory system, it is important to remember that the grower is dealing with two realities: the reality in the system and the reality in the greenhouse or nursery. Ideally, these realities are kept in sync by using good software and consistent business practices and procedures that ensure employees notify the system when inventory impacting situations occur.
However, in real life, these two realities can and do get easily out of sync because the system isn’t aware of what happened in the real world, or says the wrong thing.
Learn more about this topic, the rigors of record keeping, and the pros and cons of a perpetual inventory system, in this post from Advanced Grower Solutions.
How Perpetual Inventory Software Can Help Your Growing Operation