What is Inventory Management?

Companies in order to do business purchase the raw material from the supplier then convert them to new products and then sell them to the customer.

The company needs to keep a track record of the purchases, manufacturing of the goods and sale of the goods.

They even need to keep a track record for the time period the raw materials and the finished goods are kept in the godown of the company.

In accounting terms, these goods that the company handles including the raw material are termed Inventory.

And, keeping a track record for the flow of goods from the purchase of the raw material to the sale of finished goods is known as Inventory Management.

Let's discuss Inventory Management – Example, Importance & Turnover Period