Mastering Inventory On Hand Management with Viindoo Software

Inventory on hand , essentially the quantity of stock readily available for use or sale, serves as the backbone of supply chain operations, directly impacting customer satisfaction, production planning, and financial health.  The ability to accurately gauge and manage this inventory is crucial for minimizing costs associated with overstocking or understocking, ensuring that businesses can meet demand without unnecessary capital being tied up in excess stock.

Understanding Inventory on Hand

What is​ Inventory on Hand?

Inventory on hand refers to the total quantity of goods or materials a company physically possesses at any given time, which are available for sale or production purposes. It plays a pivotal role in ensuring operational efficiency and meeting customer demand without delays.

Accurate tracking of inventory on hand enables businesses to maintain a balance between excess stock, which ties up capital, and insufficient stock, which can lead to lost sales and dissatisfied customers.

Importance of Inventory on Hand in Supply Chain Efficiency and Business Operations

The management of inventory on hand is crucial for optimizing supply chain operations and enhancing overall business performance. It directly affects a company's ability to respond to market demand, manage production schedules, and maintain financial health. 

Effective inventory management ensures that resources are utilized efficiently, storage costs are minimized, and the risk of obsolescence is reduced. Moreover, it supports strategic decision-making regarding procurement, production planning, and sales forecasting.

Inventory on Hand Formula

Formula Explaination

The inventory on hand is typically calculated using the formula:

Inventory on Hand = Beginning Inventory + Purchases − Sold

This formula helps businesses determine the current quantity of inventory available by considering the initial stock level, adding any new purchases, and subtracting the goods that have been sold.

How to simplify Inventory on Hand Calculation

Viindoo software streamlines the calculation process with its built-in inventory on hand calculator. This tool automatically updates inventory levels in real-time as sales are made and new stock is received, eliminating the need for manual calculations. 

Viindoo's intuitive report provides an at-a-glance view of current inventory levels, ensuring that decision-makers have accurate and up-to-date information for planning and operational efficiency.

Inventory on Hand Example

The Practical Example

Imagine a retail company starts with a beginning inventory of 100 units, purchases an additional 50 units during the month, and sells 75 units. Using the formula above, the inventory on hand at the end of the month would be:

100 + 50 − 75 = 75 units

How it works on Viindoo Software

Stock moves report

Viindoo software visualizes this process through its user-friendly interface, where each transaction affecting inventory levels is automatically recorded and reflected in the system. Users can easily track the flow of inventory with detailed reports and analytics, providing clear insights into inventory trends and facilitating informed decision-making.

Inventory on Hand Journal Entries

Inventory on hand is recorded in the balance sheet as a current asset because it represents goods that can be converted into cash within a year. The journal entry to record inventory involves debiting the inventory account and crediting the cash or accounts payable account, depending on whether the inventory was purchased with cash or on credit.

Viindoo's Accounting module seamlessly integrates with its inventory management system, automating the creation of journal entries for inventory transactions. This integration ensures that all inventory movements are accurately reflected in the financial statements in real time, enhancing the reliability of financial reporting and simplifying the reconciliation process. With Viindoo, businesses can maintain precise records without the manual effort typically associated with inventory accounting.

Beginning inventory of 100 units

Purchase 50 units

Sell 75 units

Inventory On Hand vs Inventory Forecasted

Inventory On Hand

The Inventory On Hand, or the quantity physically present, is the total amount of stock you have in your warehouse. This figure represents the actual inventory that is available for use or sale, a critical aspect of inventory management that directly impacts fulfillment and customer satisfaction.

Inventory Forecasted

On the other hand, Inventory Forecasted, also referred to as future or virtual stock, is a calculated quantity that predicts future inventory levels. It is derived using the formula: 

Inventory Forecasted = Inventory On Hand - Outgoing + Incoming. 

This forecasted stock is crucial for sales planning as it indicates what salespeople can effectively sell. When the forecasted inventory exceeds the real stock, it implies incoming products. Conversely, if it's less, it suggests that certain products are earmarked for existing sales or work orders.

How they work in Viindoo Inventory Software

Viindoo simplifies managing these inventory aspects by offering real-time tracking and accurate forecasting tools. The platform provides a clear view of both Inventory On Hand and Forecasted Inventory, enabling businesses to make informed decisions regarding stock levels, sales potential, and procurement plan.

With Viindoo, companies can easily adjust their strategy to align with current stock levels and future inventory requirements, ensuring that inventory management is both reactive and proactive.

Application in Reordering Rules

Forecasted inventory plays a crucial role in establishing reordering rules within Viindoo. These rules utilize reorder point to trigger stock replenishment, ensuring safety stock meet the business's minimum and maximum thresholds. By automate this process, Viindoo helps maintain optimal stock levels, enhancing overall inventory efficiency.

Reporting and Insights 

Viindoo also offers comprehensive reporting tools, including the ability to forecast stock levels and evaluate inventory valuation based on On Hand quantities. These features provide deeper insights into future stock movements and the financial value of current inventory, facilitating strategic planning and financial analysis.

Forecasted Report

By integrating Inventory On Hand and Forecasted Inventory management, Viindoo empowers businesses to streamline their inventory processes, from planning and sales to procurement and reporting.

Inventory Aging Report

An Aged Inventory Report is a critical tool for businesses aiming to optimize inventory management and maintain financial health. This report provides a detailed analysis of inventory based on how long items have been in stock, categorizing inventory into different age brackets (e.g., 0-30 days, 31-60 days, etc.). Such categorization helps identify slow-moving or obsolete items that may not only tie up valuable capital but also incur additional holding costs.

Advantages of Managing Inventory on Hand with Viindoo

Automation of Daily Tasks to Save Time and Reduce Errors

Viindoo automates many of the tedious tasks associated with inventory management, such as updating stock levels, generating purchase orders, and creating inventory reports. This automation saves valuable time and significantly reduces the likelihood of errors, ensuring that inventory data is always accurate and up-to-date.

Real-Time Tracking and Reporting Provides Actionable Insights

With real-time tracking and comprehensive inventory reporting, Viindoo offers businesses actionable insights into their inventory performance. Users can identify trends, monitor stock levels, and receive alerts for low inventory or fast-moving items, enabling proactive inventory management.

Integration Capabilities with Other Business Operations for Holistic Management

Viindoo is not just an inventory management tool; it's a complete business management solution. Its inventory management module seamlessly integrates with other functions such as sales, purchasing, accounting, and manufacturing. This holistic approach ensures that inventory management is aligned with other business operations, facilitating streamlined processes and better decision-making across the organization.

By leveraging Viindoo's comprehensive features, businesses can achieve greater efficiency and accuracy in their inventory management practices, ultimately leading to improved operational performance and profitability.

Getting Started with Viindoo

Step-by-Step Guide on Setting Up Inventory Management with Viindoo:

1. Sign Up and Configuration: Start by signing up for Viindoo and configuring your inventory settings to match your business's specific needs.
2. Data Migration: Import your existing inventory data into Viindoo. This can include product details, current stock levels, and supplier information.
3. Training: Utilize Viindoo's training resources to familiarize your team with the platform. Viindoo offers comprehensive tutorials and customer support.
4. Integration: Connect Inventory with other business modules, such as Viindoo Accounting,  Viindoo Sales, Viindoo Purchase, Viindoo Manufacturing, etc, for streamlined operations.
5. Go Live: Once set up, start using Viindoo for daily inventory management. Monitor stock levels in real-time and utilize predictive analytics for reordering.