The function of a possessing an inventory includes inventory control, primary function, balance of supply and demand, safety stock and geographical specialization.Inventory control is important for a gym where we can keep track on how many amount of equipment are left and being separate accordingly based on its condition weather it’s still usable. Inventory control is also important to maintaining the right balance of stock in your warehouses (Carr, 2015). It is effective while carrying out a practical class for the students where we clearly know how many amount of equipment are suitable for the amount of students to distribute which makes it tally and the class will be more productive. When you have control over your inventory, you’re able to provide better customer service (Carr, 2015). It will also help you get a better, more real-time understanding of what’s selling and what isn’t (Carr, 2015). We can prevent buying the same equipment where the store room already have the adequate amount for the class of students and we can spend on equipment which are supposed to be replace by referring to the stock check list.
Inventory systems that can be utilized in ensuring effective inventory control based on accounting records which includes the amount of equipment, brand of equipment, type of equipment and price of equipment based on the unit itself. Maintaining up-to-date accounting records of the inventory account helps improve inventory management control. Accurate inventory records of the amount of inventory on hand at any given time are essential in managing and controlling inventory (Way , 2007).
This gives a clearer information to refer back in future on details of the equipment. Under the perpetual inventory system, inventory purchases and uses are directly recorded in the inventory account as pluses and minuses respectively, allowing a business easy access to inventory information (Way , 2007). Determine the equipment weather it is old or new stock are easily to differentiate by using this method, which is important on separating when to use based on tournaments or training event for the students to use. It is a better method on maintaining the equipment properly. Physical count thus play an important role on managing the inventory system. Much more systems and software are invented for the convenience sake but it may cause error as well. Physical count of inventory is an important measure for improving inventory management control. No matter what inventory system a business uses and how well it keeps the inventory records, losses of actual inventory because of theft, breakage or waste are always a possibility and may not be reported and recorded in the inventory account in a timely fashion (Way , 2007).
A physical count must be done during the year end where equipment are checked weather it gone badly or still in good condition. Importantly the right amount of unit regardless of being kept or being used for training, making sure there is no loss of equipment or being stolen. While some business owners prefer manual record keeping systems, most businesses use an electronic record keeping system – making it easier to capture information, generate reports and meet tax and legal reporting requirements.Electronic bookkeeping helps you to record business transactions, including income and expenses, payments to workers, and stock and asset details (Quensland, 2016). Thus is effective for managing the gym equipment where the details are kept safely and information are easily to retrieve.
Allows you to back up records and keep them in a safe place in case of fire or theft (Quensland, 2016). A backup is very important for managing the gym equipment that give us a reference and record of the price list, unit of equipment and type of equipment we have. Automatically tallies amounts and provides reporting functions (Quensland, 2016).
It saves most of our time on repeating the process of counting and referring in the store room, in fact the updated info is placed on the top to keep us up to date rather than glancing through everything. Some business owners may want to use a simple, paper-based record keeping system. There are certain advantages to using manual record keeping. Less expensive to set up (Quensland, 2016). Taking an example of a small gymnasium which is not necessary to use a high technology on managing the inventory system therefore manual system is suitable for them to process. Correcting entries may be easier with manual systems, as opposed to computerized ones that can leave complicated audit trails (Quensland, 2016).
A small gymnasium does not have to record too much complicated and not relevant details that does not help to manage the gymnasium well, a manual system is more than enough to arrange information accordingly. Data loss is less of a risk, particularly if records are stored in a fire-proof environment (Quensland, 2016).The purpose of carrying out the process of writing off and disposal of assets is to ensure spoiled items have to be thrown away and to replace a new equipment for a better use. Importantly the safety of equipment used, weather the bad condition of the equipment will harm the students when being used, therefore we must prevent injuries from happening and dispose the equipment at a proper place. An example of the scenario arises when you sell an asset, so that you receive cash (or some other asset) in exchange for the fixed asset you are selling (Tools, 2010). Depending upon the price paid and the remaining amount of depreciation that has not yet been charged to expense, this can result in either a gain or a loss on sale of the asset (Tools, 2010).