What is Inventory Accounting?

Inventory accounting is an important part of accounting. It will affect pricing and accounting issues for changes in inventory assets. Inventory accounting will help you know how much stock you have, what it cost you, and what is worth to your business.

Inventory accounting will be recorded as company assets. There will be three main phases related to inventory in the production process: raw materials, product manufacturing, and finished products prepared for sale.

Inventories in any of the three production stages may change in value. Changes in value can occur for a number of reasons such as depreciation, obsolescence, changing tastes of customers, increased demand, decreased market supply, ...

An accurate inventory accounting system tracks changes in inventory at all three production stages and adjusts the value of the company's assets and inventory related costs accordingly.

Depending on the type of business, the inventory bookkeeping is different, but in general, the job includes:

  • Check the validity of invoices and documents before doing Import / Export.

  • Check and enter documents and data of goods into the system software

  • Accounting of the import and export of goods and raw materials; Perform revenue, cost and cost accounting

  • Make inventory reports, import and export reports, and other related reports according to regulations

  • etc...

Why it is important for your business?

It can be said that inventory accounting will help to accurately reflect the financial situation of the company. This is explained because it allows firms to assess at a specific location where production can increase the rate of return per product in a product cycle.


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If you, as a business owner, see that you cannot handle accounting on your own, consider hiring an accountancy service for contractors to help you with it.

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