Warehouse Inventory Control, Raw Material and Finished Product
ANEPSA carries out the Control of Inventory, Raw Material and Finished Product Warehouse (Current Assets), in order to make an excellent presentation to the client and to answer all their questions.
What is current assets?
Current assets are the assets and rights that are liquid (or that can become liquid after one year) of a company. It refers to the money that the company has to cover expenses. For example: the money you have in the bank, products in stock (stock), debts from customers, treasury and short-term financial investments.
What is a warehouse inventory?
An inventory is defined as the accumulation of finished products or in process, raw materials or items that are in maintenance, which are available for immediate use, for consumption, sale or transformation. In the inventory are included from the simplest elements that the company has, to the most complex assets. An inventory is of vital importance within a company, since its main purpose is to be able to satisfy the demands of the users without the need for there to be a wait in between. In this way, the production process of the company is not interrupted.
Inventory according to Bulletin C-4
“The item of inventories is made up of the goods of a company destined for sale or production for subsequent sale, such as raw materials, production in process, finished articles and other materials used in the packaging, packaging of merchandise or the spare parts for maintenance that are consumed in the normal cycle of operations.”
Important Concepts on Inventory Control and Warehouse in Finished Product (Current Assets)
It is important to know some keywords to understand what refers to inventories.
- Tag: It is a product identification card that is attached to them and usually has a barcode to facilitate control and registration.
- tagging: Action of placing tags in a certain place, according to the code, description and location of the product.
- Purpose of the tag: It is a means of control by means of three checks with which the physical existence of the product to be inventoried is fully identified.
In accordance with the Mexican Institute of Public Accountants and the Generally Accepted Accounting Principles in BULLETIN C-4, the following concepts are defined:
- Raw material: Ingredient, substance or object that is transformed through a production process to obtain a product.
- Production in process: "They are all those products or substances that go through a process for their transformation into a finished product." According to Bulletin C-4, "a cut must be made in the operation and therefore it will be evaluated in proportion to the different degrees of progress that the elements that make up its cost have."
- Finished Article: According to Bulletin C-4, "includes those articles that will be preferably used for sale within the normal course of operations and the recorded amount will be equivalent to the production cost in the case of industries and the acquisition cost in the case of businesses. Finished items delivered on consignment must be part of the inventory at the corresponding cost, this same operation corresponds to merchandise on display or on view.”
- packaging: Are those products that serve to protect and easily manipulate other products either in their production or sale process.
- Parts and Tools: Are those items that are implicit in the product process, which are not raw materials or products in process.
What information does the label contain?
- Company name
- Folio: Consecutive number for each tag
- Date of issue: Date of issue of the label, not more than 5 days from the date of inventory
- Code: It must appear both on the label and on the asset/product.
- Description: Brief description of the product.
- Location: Area, rack, row, position, etc.
- Name: Name of the person who performs the count.
- Quantity: Quantity of inventoried pieces.
- Measurement unit: Unit in which the product is counted (piece, liters, kilos, etc.)
Why perform Inventory and Warehouse Control on Finished Product (Current Assets)?
This type of service arose from the need for taxpayers to carry out inventories in accordance with what the law establishes in the Tax record.
ASSETS TAX LAW Art. 2º. Annual Average of Inventories.
to that of Inventories.
The inventories of raw materials, semi-finished or finished products that the taxpayer uses in the business activity and has at the beginning and at the end of the fiscal year, valued according to the method that has been implemented, will be added and the result will be divided by two.
Inventories update: LIAC-3, Para. 4; Presumptive determination for omitting or altering inventories or for not valuing them: CFF-55-III-c, 56, 59, 60; Lien on inventories of foreign residents: LIAC-1-Para. 2, RIAC-25; Inventory of vegetables to manufacture pasta, cookies, oils and soaps: RIAC-12; Proportionalization in irregular financial years: RIAC-25ª.
The inventory of current assets constitutes the existence, at cost price, of the articles purchased or produced by a company, for its commercialization. Inventory includes all merchandise owned by the company that is in storage, warehouse, in transit or delivered on consignment; Likewise, merchandise that is not owned by them and is in their possession because they have been received on consignment or is sold and has not yet been delivered to their customers is excluded from the inventory.
The Current Asset Inventory service can be used for the following products such as:
- Finished product.
- Raw material.
- Production in process.
- Packing material.
During the Current Assets Inventory process, depending on the location or location of the product, it will be necessary to use equipment such as: forklifts, skids and ladders, to carry out labeling and counting.
What kind of companies request this type of services?
- Medium to large companies, with marketers, distributors or manufacturers, where buying and selling merchandise is the profit generating center.
- Where large amounts of current assets, finished products, work in progress, spare parts and tools are handled.
Requirements that the company that requests the Inventory Control of Current Assets must meet
- Before visiting the warehouse to see how it is distributed, size and type of material, apply a questionnaire.
- Previous meeting to carry out work plan.
- Detailed location of the warehouse or warehouse.
- Warehouse sketch.
- Name of the person in charge or coordinator on behalf of the client.
- Guide our staff on safety standards and restricted areas.
- Access to our management staff.
- Approved budget.
Purpose of the Inventory Control Service and Warehouse in Finished Product (Current Assets)
- Tax regulations indicate that it must be carried out at least once a year.
- Avoid loss or theft.
- Carry out inventory turnover analysis.
- Confirm if there is consistency when carrying out inventories.
- Repercussion of the result of the inventory in the cost of sales.
- Verification of the total amount in books with the physical.
- Compare and Evaluate the work done with your current inventory system
- Develop an adequate procedure on inventories and their rotation.
- Always have the necessary material.
- Control of returns, defective and obsolete material.
- Handling expenses in the warehouse, handling and insurance.
- That the accounting area has the correct data to make its financial statements.
- The result of the inventory to the warehouse is the same as that registered in the books.
- Take inventory in record time.
- Avoid downtime when using company personnel.
- Avoid false information or manipulation of inventories.
- Greater confidence in results.
- Support company staff for their inventories.
- Do not pay extra time to hire specialized personnel for inventory.
- Do not distract staff from their daily activities when carrying out inventories.
- Suspension of Activities for the realization of inventories, at the time of fiscal closing.
- Closing of stores due to inventory.
- Immediate availability.