Role within organizations

Role within organizations
SAM can serve many different functions within organizations, depending on their software portfolios, IT infrastructures, resource availability, and business goals.
For many organizations, the goal of implementing a SAM program is very tactical in nature, focused specifically on balancing the number of software licenses purchased with the number of actual copies installed. In doing so, organizations can minimize liabilities associated with software piracy in the event of an audit by a software vendor or a third party such as the Business Software Alliance (BSA). SAM, according to this interpretation, involves conducting detailed software inventories on a periodic basis to determine the exact number of software installations, comparing this information with the number of licenses purchased, and establishing controls to ensure that proper licensing practices are maintained on an ongoing basis. This can be accomplished through a combination of IT processes, purchasing policies and procedures, and technology solutions such as software inventory tools.[3]
More broadly defined, the strategic goals of SAM often include (but are not limited to) the following:
Reduce software and support costs by negotiating volume contract agreements and eliminating or reallocating underutilized software licenses[2]
Enforce compliance with corporate security policies and desktop standards[4]
Improve worker productivity by deploying the right kinds of technology more quickly and reliably[2]
Limit overhead associated with managing and supporting software by streamlining and/or automating IT processes (such as inventory tracking, software deployment, issue tracking, and patch (computing) management)[5]
Establish ongoing policies and procedures surrounding the acquisition, documentation, deployment, usage and retirement of software in an effort to recognize long-term benefits of SAM

CYCLE COUNTING CAN IMPROVE YOUR BOTTOM LINE

CYCLE COUNTING CAN IMPROVE YOUR BOTTOM LINE
An accurate inventory is necessary for maintaining customer satisfaction as well as a company's bottom line. An effective means to attaining inventory accuracy is cycle counting. Many companies that employ this method have had success in maintaining an error-free inventory throughout the year. This year-round success can result in inventory accuracy of 95% or greater! However, some companies have tried cycle counting only to find it has taken more time and energy than they have to spare because it was not implemented properly. The following discussion highlights what can be gained from cycle counting and when it should be applied.
What can be gained? One advantage to cycle counting is error-free records. This can result in greater customer satisfaction and the ability to lower inventory levels. To get to this point, though, one must understand what cycle counting is and what it can achieve. The definition of cycle counting is to count a small percentage of pre-selected inventory on a regular cycle. A regular cycle can be every day or every week depending on the amount of inventory and labor resources. Samples counted can then be compared to inventory records to determine accuracy.
The overall objective of this procedure is to achieve an accurate inventory. The following must be done in order for the desired results to be achieved:

1) Keep the system up to date so the cycle count is accurate.
2) Ensure inventory records have a high level of accuracy.
3) Determine the reasons for errors.
4) Correct the situation that is causing these errors.

Best free inventory control softwares

1) http://www.freedownloadmanager.org/downloads/inventory_control_software/
2) http://ezinearticles.com/?Free-Inventory-Control-Software&id=254704
3) http://www.findapp.com/fMgmt/products.aspx?C=390%7CST-2
4) http://www.inventorysoft.com/
5) http://www.download.com/Basic-Inventory-Control/3000-2067_4-10060417.html?cdlPid=10641808

Inventory Management Made EasyBy

Inventory Management Made EasyBy:

Kingston J. Amadan
Depending on the organizational structure of a business, inventory management can be a complicated endeavor. Many businesses require updated inventory figures to be available to not only sales and ordering personnel, but accounting, management and logistics departments as well. When inventory can’t be reconciled companywide, it makes keeping accurate accounts of sales figures, stock levels and availability extremely difficult.Thankfully, there are several software applications on the market that make keeping track of inventory easy, though not all inventory management solutions are created equally. More recent offerings are designed to allow real time automated adjustment of stock levels to reach multiple departments, providing up to the minute information everywhere it’s needed. Accounting personnel require company-wide inventory statistics so that the type of accounting systems they utilize can be reconciled, be it first in/first out (FIFO) or last in/first out (LIFO). Contrary to what many outside of the accounting profession assume, inventory reconciliation is more then just an end of year process and should be managed day to day for proper accuracy and accountability. Software solutions such as SAP Business One or Sage MAS 90 and 200 help accounting personnel manage inventory reconciliation through the input of other departments or preferably, through an automated system that adjusts data as changes occur.For sales personnel, being aware of inventory levels is a crucial part of providing superior customer service, as orders should be based on existing stock levels. Without the ability to see stock quantities, providing accurate shipping information is next to impossible. Of course, not all businesses are of the nature that puts a premium on efficient distribution, but for those that are, inventory management software applications can help ensure that orders can be filled in a timely manner.

Inventory examples

Inventory examples
While accountants often discuss inventory in terms of goods for sale, organizations - manufacturers, service-providers and not-for-profits - also have inventories (fixtures, furniture, supplies, ...) that they do not intend to sell. Manufacturers', distributors', and wholesalers' inventory tends to cluster in warehouses. Retailers' inventory may exist in a warehouse or in a shop or store accessible to customers. Inventories not intended for sale to customers or to clients may be held in any premises an organization uses. Stock ties up cash and if uncontrolled it will be impossible to know the actual level of stocks and therefore impossible to control them.
Whilst the reasons for holding stock are covered earlier, most manufacturing organizations usually divide their "goods for sale" inventory into:
Raw materials - materials and components scheduled for use in making a product.
Work in process, WIP - materials and components that have begun their transformation to finished goods.
Finished goods - goods ready for sale to customers.
Goods for resale - returned goods that are salable.
Spare parts

Theory of Constraints cost accounting

Theory of Constraints cost accounting
Eliyahu M. Goldratt developed the Theory of Constraints in part to address the cost-accounting problems in what he calls the "cost world". He offers a substitute, called throughput accounting, that uses throughput (money for goods sold to customers) in place of output (goods produced that may sell or may boost inventory) and considers labor as a fixed rather than as a variable cost. He defines inventory simply as everything the organization owns that it plans to sell, including buildings, machinery, and many other things in addition to the categories listed here. Throughput accounting recognizes only one class of variable costs: the operating expenses like materials and components that vary directly with the quantity produced.
Finished goods inventories remain balance-sheet assets, but labor efficiency ratios no longer evaluate managers and workers. Instead of an incentive to reduce labor cost, throughput accounting focuses attention on the relationships between throughput (revenue or income) on one hand and controllable operating expenses and changes in inventory on the other. Those relationships direct attention to the constraints or bottlenecks that prevent the system from producing more throughput, rather than to people - who have little or no control over their situations.

FIFO vs. LIFO accounting

FIFO vs. LIFO accounting
Main article: FIFO and LIFO accounting
When a dealer sells goods from inventory, the value of the inventory is reduced by the cost of goods sold (CoG sold). This is simple where the CoG has not varied across those held in stock; but where it has, then an agreed method must be derived to evaluate it. For commodity items that one cannot track individually, accountants must choose a method that fits the nature of the sale. Two popular methods exist: FIFO and LIFO accounting (first in - first out, last in - first out). FIFO regards the first unit that arrived in inventory as the first one sold. LIFO considers the last unit arriving in inventory as the first one sold. Which method an accountant selects can have a significant effect on net income and book value and, in turn, on taxation. Using LIFO accounting for inventory, a company generally reports lower net income and lower book value, due to the effects of inflation. This generally results in lower taxation. Due to LIFO's potential to skew inventory value, UK GAAP and IAS have effectively banned LIFO inventory accounting.
In computer science, FIFO and LIFO correspond to the queue and stack data structures, respectively. In fact, the acronyms are commonly used to denote the corresponding data structures.

[edit] Standard cost accounting
Standard cost accounting uses ratios called efficiencies that compare the labour and materials actually used to produce a good with those that the same goods would have required under "standard" conditions. As long as similar actual and standard conditions obtain, few problems arise. Unfortunately, standard cost accounting methods developed about 100 years ago, when labor comprised the most important cost in manufactured goods. Standard methods continue to emphasize labor efficiency even though that resource now constitutes a (very) small part of cost in most cases.
Standard cost accounting can hurt managers, workers, and firms in several ways. For example, a policy decision to increase inventory can harm a manufacturing managers' performance evaluation. Increasing inventory requires increased production, which means that processes must operate at higher rates. When (not if) something goes wrong, the process takes longer and uses more than the standard labor time. The manager appears responsible for the excess, even though s/he has no control over the production requirement or the problem.
In adverse economic times, firms use the same efficiencies to downsize, rightsize, or otherwise reduce their labor force. Workers laid off under those circumstances have even less control over excess inventory and cost efficiencies than their managers.
Many financial and cost accountants have agreed for many years on the desirability of replacing standard cost accounting. They have not, however, found a successor