The Benefits of Accurate Inventory Forecasts

Posted on: September 17th, 2013
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Accurate inventory forecasting is critical component of businesses that supply products. To be successful, your company must produce and deliver its products in a timely and efficient manner, and it’s not sufficient to know what inventory you have. It’s important to analyze the demand for your products and project your inventory requirements into the future, so you can place orders with suppliers, schedule and hire employees, and make other decisions that affect your cash flow and liquidity. That’s made Chief Financial Officers (CFOs) crucial participants in supply chain decisions.

Inventory is essential to revenue and sales growth, but it does tie up cash on balance sheets. This means that inventory prediction is an important balancing act, allowing companies to free up capital that would otherwise be tied up in inventory. This is often further complicated by differences in demand by product line or even geographical region. An experienced CFO can act as an Orlando financial consultant for your business and can help your company by carefully watching this metric, analyzing supply chain data, and helping you make accurate demand predictions. In addition to lowering the costs of your ongoing inventory, accurate inventory forecasts also lower other costs. Inefficient companies spend more when rushing to fill orders, including overtime costs and expedited shipping. Other the other side, unused inventory can become obsolete, which can mean expensive write-offs.

Regularly adjusting demand predictions using data from suppliers, partners, and retailers creates a snapshot of current demand in the marketplace, and gives you the information you need to capitalize on growth opportunities while keeping down costs. If your business needs to develop accurate inventory forecasts, an Orlando financial consultant or an outsourced CFO from CFO Strategic Partners can help. Our experienced financial professionals can develop inventory models that allow you to adjust to marketing conditions and make sound financial decisions. For a free financial analysis, call us at 407-426-8288.

 

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