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Tips for Managing Stock of Expired Goods

Tips for Managing Stock of Expired Goods

Inventory of goods or stock of goods is one of the essential things in a company. Why is that? Because the size of the store or supply of goods in a company can affect the company's balance sheet and income statement.

If the stock of goods available is large enough, it can affect the company's need to maintain the existence and quality of the inventory. If the supply of goods is not available, it will affect the production and sales processes of the company.

Inventories of goods are goods purchased and held for resale, manufactured or finished goods being produced by the entity, or materials and equipment used in the production process. 

Based on this, the company can determine the acquisition price and the value of the stock of goods presented on the balance sheet.

In the inventory management process of a company, there are two commonly used methods, namely first-in, first-out (FIFO), and last in first out (LIFO) methods. Usually, every company will use the process of recording stock of goods according to the company's type of business. 

This article will discuss Tips for Managing Expired Stock of Goods by paying attention to several methods such as FIFO, LIFO, and FEFO.

Many think owning a shop is easy, as long as there is a significant capital and the goods are fully available. Managing a store is not easy, even as difficult as managing an offline business. 

It would help if you had a systematic strategy for marketing, supplying goods, and even stock management. Moreover, stocks of goods with shelf life or expiration need extra supervision, so expired goods are not sold to buyers. 

You must pay close attention to tips on managing stock items that can expire. Please see the complete tips below!

Understanding the FIFO Method in Stock

The first method in managing inventory is First In, First Out (FIFO). This method is used for perishable goods. As the name suggests, the first item to enter must be the first item to be sold. For example, if you sell food ingredients such as rice or flour, you have to note which elements come first, then that's the first to be sold.

Don't get confused with the last item that came in, OK? The mess of removing this item will make it difficult for you to record the item's expiration. If the expiration date is near and the goods are still stuck in the warehouse, you can lose money because you can't sell expired goods.

Use the LIFO method for retail items

If you enter the retail world, such as a clothing store, storing goods is different from the previous method. The Last In First Out (LIFO) method is suitable for retail. The goods that last entered were the first to be sold.

At a clothing store, items that are in season or new must be exhibited in the shop window to invite buyers. How about old stuff or last season stuff? 

The way to manage it is on a different shelf so that buyers are more willing to buy new items. This method is done so that your retail goods are not outdated.

Use the FEFO method to manage items that expire quickly

The difference between the items you sell and how they are stored is also different. If you have a drugstore or packaged food store, the First Expired First Out (FEFO) method is the most appropriate.

In short, the product with the most temporary expiration date is placed at the front so that can pick it up first. Can only sore products with a more extended expiration date in the warehouse.

Remember, no matter the time of arrival. This method fixes the expiration date on the placement of the item.

Organize storage of goods according to the method used

The method used to manage and store goods must follow the goods you sell. For example, if you own a food or beverage store, the method used is the FEFO method, where you must remove the short expiration date first. 

Therefore, you must arrange the storage of goods according to the method. In the FEFO method, goods with short expirations must be sold immediately, while those with longer ends can be stored in the warehouse. You can also take advantage of efficient inventory management.

Must carry out the inventory of goods carefully and periodically, especially in storing goods with the FIFO method where the first item to arrive is the first item to be issued. 

You have to be careful; the goods can be damaged and cannot be sold again because of data collection errors. Therefore, make sure you manage inventory data collection carefully.

Returns of expired merchandise

Don't forget to return expired merchandise, OK! When the supplier arrives, you can provide data on the goods to be replaced. Later, the supplier will process the return request from your store. 

Always remind the supplier to take returned goods because the next bill will be deducted with the nominal return. However, some items cannot be returned, so before starting a work agreement with the supplier, make sure there is an agreement regarding the returned goods.

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