The tool currently works in just-in-time, ie. that the inventory is bought and consumed during the same month. For companies that need to manage their inventory differently, we have created an "Inventory" menu in the "Sales" menu. This is the orange tab located at the top right.
When you are in the "Inventory" menu, you see the list of your different products. For each product, you must choose the supplier's payment term. If you click on the arrow to the left of a product, a manual inventory management schedule opens.
Let's take a concrete example:
- You sell Product A;
- The selling price of Product A is $ 100 and its cost is $ 50 per unit;
- The supplier's payment term is 30 days;
- You expect sales of 100 units per month;
- You must make minimum purchases in advance of 1,000 units;
- You buy your inventory in month 1 of your budget;
- Your sales start in month 2 of your budget.
Each month, you sell 100 units of your product. 100 products x $ 50 = $ 5,000 in inventory purchased and consumed automatically by the system. The impact on the inventory is $ 0 because Budgeto buys $ 5,000 of inventory and consumes $ 5,000 of inventory in the same month. The 30-day payment term will result in a cash outlay of $ 5,000 the following month in the cash budget.
Since you must make minimum inventory purchases of 1,000 products, you must manually manage your inventory. In this case, you will need to manually purchase $ 50,000 ($ 1,000 x $ 50) inventory in month 1 and consume $ 5,000 in inventory each month. When your inventory reaches a minimum balance of $ 5,000, you must buy back $ 50,000 of inventory.
The impact on your cash budget will then be adequate, since the system will automatically buy inventory (purchases by the system) that you eliminate by managing the inventory manually (manual purchases)