In a perfect world, the inventory that you purchase for your business would easily be sold as soon as it comes into your possession. But sadly, this isn’t always the case.
Aside from just not being able to sell some of the inventory that you might have purchased for your business, you might run into other losses as well. Whether it’s something that goes wrong while your inventory is in transit, something perishable that you can’t sell anymore, or a loss due to a natural disaster, knowing what to do when this happens can help you keep your business on solid footing.
To help you with this, here are three things to do when you lose business inventory.
Rethink Your Loss Prevention Strategy
Every business should have some kind of loss prevention strategy. And ideally, this strategy should help prevent you from losing inventory even when disaster strikes. But if your loss prevention strategy has been put to the test and come up wanting, you may need to rethink how you’re doing things.
Depending on what caused your loss of inventory, you should take a look at what procedures you had in place to prevent this. If the answer is nothing, you should try to make plans for how you’ll prevent something like this in the future. And if you plan just didn’t work the way you has intended it to, try to find where the breakdowns happened and what you can do to stop these things if the situation ever presents itself again.
Get Control Of Your Inventory Management System
One thing that can help to reduce the loss of inventory is having good control over your inventory management system.
For the best results, you should keep track of everything related to your inventory from your suppliers all the way to your customers. You should pay particular attention to what you’re doing when the inventory is in your possession, like how your inventory is tracked and handled, to help you keep from losing that inventory.
Disclose The Loss Appropriately
When you have inventory that is lost and you can’t sell it anymore, you need to make sure that you disclose this loss for your business appropriately.
While every business expects to have some level of inventory loss, if you have a time where you lose a large amount of inventory, you’ll need to include this on your income statement. This can help you and your investors keep better track of how this loss in inventory is affecting the bottom line of your business.
If you have an inventory loss for your business, consider using the tips mentioned above to help you know what to do immediately and what to do to help keep this from happening to you in the future, too.