During the March quarter 2026, inventories kept by companies operating in Australia increased by 0.5 per cent in volumes, according to the Australian Bureau of Statistics (ABS). Also, according to that same report, the value of inventories was influenced by changes in prices. The ABS set the inventory valuation adjustment, a component of national accounts that measures the influence of price changes on inventories, at $2,442 million. In summary, companies had a slight increase in their stock holdings, with changes in prices affecting their stock value. Therefore, for a Melbourne wholesaler or e-retailer, stock control becomes a matter of money.
Stock Is Money That Is Not In Motion Anymore
Each box sitting on the shelf is a representation of money already invested but not yet recovered from a sale. With the changing levels of stock and prices, the amount of money tied up in the warehouse keeps changing. Also, high stock value may mean high insured value, and policy limits have to be checked when the levels of stock keep rising.
The carrying cost is something that can be easily underestimated within inventory management Melbourne, especially due to the way it is presented in most cases. In most cases, carrying costs do not come in one easy-to-understand invoice for one month. Carrying costs include storage, possible damages, shrinkage, obsolescence and cost of capital. Their impact varies according to business, margins and the time of holding stock.
Spreadsheets Are The First Thing To Become Obsolete
Usually, the process starts with spreadsheets, and they do a decent job for some time. Usually, problems begin when several individuals use different copies of a spreadsheet to work on, or when someone mistakes the number of deliveries and inputs 150 instead of 105. When a company sells via website, marketplace and wholesale accounts, one shared stock becomes subject to multiple risks. One late update leads to the selling of the last item twice, and the customer receives a cancellation message.
Disciplines That Matter More Than Any Software
Software is very helpful but it is the discipline behind it that decides the reliability of the figures:
- Matching every delivery with supplier documentation before the stock becomes available on the shelf.
- Creating a unique storage place for every item so as not to depend on the employee’s memory.
- Making cycle counts of small portions regularly rather than performing an annual stock count.
- Using FIFO and FEFO methods for food products, cosmetics and batched products.
- ABC Analysis to concentrate the stock taking efforts on expensive products where mistakes mean the most.
Interpreting Numbers In Order To Make Buying Decisions
Stock turnover rate reveals the number of times per year inventory is sold; it helps to understand the condition of the stock immediately. Days of on-hand stock is the same measure but from a different perspective as it shows how much time the existing stock can be sold if everything stays the same as it is now. A product that has 300 days of coverage is usually not a buffer but money stored on the shelf. Early detection of slow-moving items provides enough time to sell them by bundling or providing discounts. The importers face additional difficulties as it requires careful setting of the reorder point because of the lengthy overseas lead time.
The Areas Where The WMS Really Earns Its Keep
Barcode scanning at receiving, put-away, picking and shipping can help to minimise manual entries if the product data is correct. Real-time visibility gives an opportunity to have the same picture of stock levels for sales and purchasing departments at once. Integration with ecommerce platforms and accountancy software minimises the duplication of entering information into separate software systems. Then reports can help to make buying decisions rather than record the mistakes made. However, the system itself cannot improve the discipline, as hasty receiving leads to input of wrong data into the system.
The 30 June Question Every Owner Should Think About
Year-end valuation of the stock goes into the taxes and it is the reason why the records should be correct not only at the warehouse level. The Simplified trading stock rules by the ATO provide an option for eligible small businesses to perform their year-end valuation. Small business entities with the aggregated turnover up to $10,000,000 do not need a formal stocktaking if stock value changes by no more than $5,000.
