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title: "Introduction to Inventory Management"
canonical: "https://kb.myframeworks.com.au/space/PROSTIXV48DOC/31102931/Introduction%20to%20Inventory%20Management"
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The Inventory of a retailer or wholesaler is usually goods that are available for sale and is commonly known as trading stock.  The Inventories of a manufacturer include goods yet to be used in the manufacture process (raw materials), goods that have been partially completed (work in process) and goods that are completed and ready for sale (finished goods). In ProStix, all types of information and controls can be stored for each product regardless of what quantity, shape or form it is stored in, how it is delivered, what price it is bought or sold for, or how often it is reordered. The value of Inventory on hand at the end of a financial period is important as it affects two financial statements – it appears in the asset section of the Balance Sheet and it appears in the cost of goods sold on the Profit and Loss statement. Errors in the closing Inventory figure will affect the profit for two accounting periods – it affects the closing inventory figure for the first period and the opening inventory figure in the next period. Before a product can begin its life cycle in ProStix, certain mandatory information must be recorded for that product.  Most of this information must already exist before a product can be added to the Product Master File (PMF) : A supplier may provide more information about a product or change its packaging, customers may want to purchase it in much smaller quantities, and it may be easier to find if its location is known.  Depending on the extent of the use of a product and the information available for that product, much more detail can be stored for a product. There are hundreds of different items of information that can be stored for a product.  Some examples are: This basic information can change from time to time or more information about a product may become available or required by other departments or customers. Product information should be kept up to date, especially when this information relates to pricing issues.  Inventory is one of the largest assets of a business and accurate tracking and valuation of that asset is essential for all reporting and decision-making processes associated with the business. This training manual and  Inventory Management User Guide  covers pre-defined information required before a product can be added to the PMF, priced and subsequently maintained.  The following topics are covered: