Where's the money gone?

It is a constant source of amazement to me that so many companies be they large or small fails to keep a control of their inventories. Whilst Management consistently push for increased sales performance, the question of housekeeping is often put on the back burner or it would appear totally neglected.

The question of Stock is a thorny issue. There are obvious downsides in operating a “just in time policy” but at the same time excessive stock levels not only ties up valuable working capital but can become obsolete leading to substantial write downs. (There is also the danger of the “smoke and mirrors” approach to stock valuations which give false impressions as the company’s financial well being).

On the subject of receivables this is traditionally a time when the most inventive forms of delaying payments come to the fore. Even more so against the current backdrop it is the season to be vigilant.

This begs the question: how comfortable are you with your Stock and Debtors controls?

It might be timely to conduct a pre-emptive review of your operating systems now rather than wait for the post mortem results.