Excess and Obsolete (E&O) inventory is most frequently discussed issue that affects distributors, manufacturers, and retailers. The inventory signifies massive investment for any business, and if it is not traded for some reason, it consumes warehouse space and increases liability.
This guide explains guidelines for adjustments, disposition, inventory valuation, identify the E&O root cause, responsibilities and reserves.
This Excess and Obsolete Inventory Policy Guide help you proactively identifying, accounting for and resolving the disposition of excess and obsolete inventory. Also to assign the proper accountability for continuous improvement activities focused on reducing the occurrence of excess and obsolete inventory by identifying and addressing the related root causes
This policy when implemented offer:
#) Inventory reserves evaluation to identify and review all inventory to proper estimations on a quarterly basis.
#) Proper planning to ensure accuracy on all levels.This EXCESS AND OBSOLETE INVENTORY POLICY guide are comprised of 12 pages with the 2696 wordcounts. Included as Microsoft Word and PDF format, so you can customize it for your own business.
Table of Content
EXCESS AND OBSOLETE INVENTORY POLICY – ALLOWANCE FOR EXCESS, OBSOLESCENCE, AND SHRINKAGE INVENTORY
- POLICY & SCOPE
- WHEN INVENTORY IS CONSIDERED EXCESS AND OBSOLETE
- UNDERSTANDING CONTRIBUTORS FOR EXCESS & OBSOLETE INVENTORY
- INVENTORY ROOT CAUSE & DISPOSITION CODING
- GUIDELINES – SHRINKAGE
- GUIDELINES – OBSOLESCENCE
- GUIDELINES – EXCESS INVENTORY
- QUARTERLY MODIFICATIONS TO INVENTORY RESERVE
- ANNUAL MAINTENANCE OF RESERVE
- DEBIT BALANCES IN RESERVE ACCOUNTS
I hope you and your financial controller find it useful!
You will also find my blog "Excess and Obsolete Inventory Is Killing Your Business – 9 Ways You Can Survive" - https://www.scmdojo.com/excess-and-obsolete-inventory/ useful.