When looking at business terminology, inventory and assets are seen as two separate things that don’t usually come into contact with each other. However, it will greatly benefit your business to believe that inventory is an asset.
What is an Asset?
In the strictest sense, an asset is something that directly brings value to your business. In financially tight times, some of them can immediately be sold for cash. However, most of the time, they necessary parts of your business that you rely on to get work done.
There are several types of assets a business will take advantage of during work time. Tangible assets include things like furniture, hardware, and property, while intangible assets include things like intellectual property, trademarks, and patents.
What is Inventory?
On the other hand, an inventory is a list or collection of items, goods, or business contents. Many companies keep an inventory of products they sell to their customers, as well as an inventory of the tools they need on a daily basis to get their job done.
While most people think of inventory as the finished product a business needs to sell, this isn’t always the case. Many times, businesses need to keep an inventory of items in different stages of production. Most types of inventory can be broken down into raw components, work in progress, and completed goods.
How Can Inventory be an Asset?
Traditional wisdom states that these two business principles are separate things. However, inventory is an asset that brings in the majority of a company’s revenue. Finished products exit inventory and go to customers, who then provide financial resources for the company in return. These products then become some of the most important assets, because they provide so much of the income businesses need to keep operating.
But what about businesses who offer a service rather than a product? Construction and contracting companies have a variety of tools and equipment they need to keep track of on a daily basis. This inventory of tools is one of the most important assets they can have, because the company needs those resources in order to create revenue and keep functioning.
When you adopt the philosophy that inventory is an asset, it becomes even more important to track and maintain on a regular basis. You need a software that can help you track your inventory in real time. Keeping tabs on your product in real time means you know exactly how many items you can promise to your customers. You won’t promise more than you can deliver, which makes it easier to make and keep return customers.
Asset Panda created an inventory tracking solution with your needs in mind. We realize that inventory can be the most important asset your business has. Our cloud-based software makes it easy for your entire team to keep your inventory records updated in real time. If you’re away on a business trip, you can use our mobile app to check in to see how things are running back home. Knowing how your inventory is doing at any time means you can take action ahead of time if you’re about to run out of a product, so you’ll never be caught short-handed.
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