Inventory management is the foundation of a well-functioning retail business, and is a fundamental building block to a company’s success and longevity. Let our experts track, forecast, replenish, optimize your goods for you.

Inventory, often known as stock, is a crucial and widely used phrase in enterprises that deal with commodities and products. It is a substantial current asset on such firms' balance sheets and a component of working capital. Business owners must understand how inventory works for their company and how to manage it effectively by adhering to particular valuation guidelines and best practices.

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Inventory management refers to the method used by firms to maintain ideal inventory levels at all times by arranging the sourcing, storage, and sale of both raw materials and completed goods. Good inventory management results in ideal stock levels at all times at the correct price, lowering total expenses.

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Businesses can use inventory management systems to control both raw materials and completed goods, as well as the storing and processing of these commodities.

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The term inventory is defined in AS 2 of the Companies (Accounting Standards) Rules, 2006. Furthermore, the definition is provided in Ind AS 2, which is notified under the Companies (Indian Accounting Standard) Rules, 2015. Assume the entity is not a corporation but operates on a mercantile basis with commercial or professional revenue. Then, under the Income Tax Act, it may be subject to the ICDS-II, which also specifies inventory.

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There are several inventory kinds or classifications used by corporations. These comprise raw materials, work in progress or semi-finished items, finished goods, and maintenance supplies, sometimes known as MRO.