February 28, 2019
What is a Write off?
A write-off reduces the value of an asset or earnings when they become worthless for an organization. For organizations such write offs include bad debts and fixed assets that have now become obsolete. In this blog, we will discuss how stock ageing analysis helps reduce write-offs and costs.
Every organization investing in business considers stock one of its most important and prestigious assets. Optimum quantity and turnover period are essential for an organization to be successful.
What is Stock Ageing Analysis?
Stock Ageing Analysis reports help in monitoring stocks and identify slow moving inventory or such stocks that is not converting into prospects. In Tally.ERP9, Stock Ageing Analysis report displays the time period of the stock holdings. Tally.ERP9 users have the flexibility to define their own ageing slabs (Press F6 for details). The Stock Ageing Analysis report divides stock based on different time periods. This helps differentiate between old and current stock. By default, the report includes ageing periods of more than 45 days, 45 to 90 days, 90 to 180 days, and less than 180 days. Users can define the ageing slabs, depending on their requirement. The age of the items, by default is set at from the date of purchase.
The report is displayed in a columnar format. It shows item details, quantity, value, and an age-wise break-up. To view the report for all stock items, the user must click on Primary from the List of Groups.
To view the Stock Ageing Analysis Report; the user needs to follow the below mentioned steps:
1) Go to Gateway of Tally (GOT)
2) Click on Display
3) Click on Inventory Books
4) Click on Ageing Analysis
5) Select the group for which the Ageing Analysis is required.
The Ageing Analysis report helps management identify expired batches. It also lists batches that are nearing expiration. Stock Ageing Analysis is crucial for industries dealing with perishable goods. Once products cross their expiry date, they lose all value.
How can Stock Ageing Analysis help in reducing Costs and Write-offs?
Businesses prepare stock ageing analysis reports by monitoring and identifying slow-moving stocks or products that do not generate revenue. Suppose a company purchases some stock and incurred some cost of production. But somehow the stocks are not getting sold. It will try to sell it off at any cost, within its validity period, in order to avoid incurring any loss on the organization’s part.
In such conditions, businesses prepare the Ageing Analysis report by determining the product’s age based on its purchase date and valuation. Which helps the management of the concerned organization in taking fruitful decisions. These above mentioned are the steps shows how stock ageing analysis helps reduce write-offs and costs. for more visit our website www.easyreports.in