Discuss how the company could use accounting, technology, or data analytics to better manage and monitor their inventories.
Discuss how the company could use accounting, technology, or data analytics to better manage and monitor their inventories.
Peer #1-James:
Discuss how the company could use accounting, technology, or data analytics to better manage and monitor their inventories.
I am a huge Costco fan; I will make any excuse to go there even when I do not need to buy anything. To me as an outsider I see that Costco has a well-managed accounting system as they have their receipt and merchandise verifiers at the door, I feel that it would not be easy to take free merchandise. Which allows them to not have much inventory losses.
Recommend one best practice that merchandisers can use to better control their inventories.
As far as them having the verifiers at the door I feel that that is one of the major inventory controls that benefits them. I would not use self-checkout, my local Costco does not have self-checkouts yet, I am not sure if that is something they are planning to add in the near future, I am also not sure how that would be a risk with having them check receipts at the exit maybe it will not be a major inventory loss.
What is the effect on cost of goods sold, gross profit, and net income if ending merchandise inventory is understated?
This would be like entering wrong information similar to what we talked about last week in our balance sheet with omitting information and or providing incorrect information. It will affect our numbers for accuracy revenue or losses within our organization. “An error in determining the cost of ending merchandise inventory creates a whole string of errors in other related accounts” (Miller-Nobles/Mattison).
Reference
Miller-Nobles/Mattison. Horngren’s accounting: The financial chapters (7th ed.). Pearson.
Peer #2-Katie
Discuss how the company could use accounting, technology, or data analytics to better manage and monitor their inventories.
Sephora is the world’s leading specialty beauty retailer. Sephora could use data analytics to better manage and monitor its inventories by leveraging predictive analytics to offer specific beauty product recommendations, offers, and Sephora loyalty incentives. Sephora is one of the best companies using predictive analytics to target customers and control their inventories. Sephora harnesses user data to offer customized loyalty tiers based on how much customers spend annually. The company customized all customer messaging and recommendations based on purchasing patterns. Sephora uses technology such as ColorIQ to conduct skin care analysis for color matching and personalized service for clients. Technology will continue to influence Sephora’s business to manage their inventory better. Regarding accounting, Sephora could use data analytics in accounting to create value and growth by leveraging computing power, cloud storage, and big data.
Recommend one best practice that merchandisers can use to better control their inventories.
A practice that merchandisers can use to control their inventories better is using data analytics in cloud-based inventory management. This practice can let companies know in real time what their inventory is. Another practice is to optimize purchasing procedures. This involves ensuring that companies use reliable suppliers to deliver goods on time and at the right price. Companies should also monitor their inventory levels and forecast demand to order the right amount of stock at the right time.
What is the effect on cost of goods sold, gross profit, and net income if ending merchandise inventory is understated?
If the ending merchandise inventory is understated, it will have the following effects: the cost of goods sold will be overstated, the gross profit will be understated, and the net income will be understated (Miller-Nobles & Mattison, 2015).
References
Miller-Nobles/Mattison. Horngren’s accounting: The financial chapters (7th ed.). Pearson.
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