BUDGETO uses inventory management just in time, i.e. the inventory for a product is purchased and consumed in the same month (the month the product is sold). For businesses that need to manage their inventory differently, we have created an Inventory menu available here.




In the Inventory menu, you will find the list of your different products. It is essential to have at least one product in Budgeto to access this menu. For each product, you can choose a payment term for your supplier and click on the arrow to the left of the product to display the manual inventory management schedule.




EXAMPLE

To understand how to use the Inventory menu, let's take a concrete example:

  • You sell 10 units of Product A in October 2018;
  • The selling price of Product A is $ 100;
  • The cost of Product A is $ 50 per unit;
  • Your provider's payment term is 30 days.




Here's how the transaction will be counted in BUDGETO:

  • $ 500 inventory will be purchased and consumed automatically by BUDGETO in October 2018;
  • The impact on the inventory will be $ 0 because there is an increase of the inventory of $ 500 at the time of the purchase and a decrease of the inventory of $ 500 during the consumption ($ 500 - $ 500 = $ 0);
  • Your 30-day payment term will result in a $ 500 disbursement in November 2018 in your cash budget.


Now, consider that you have to buy your inventory 6 months in advance. Here's how to handle this situation in the Inventory menu:


In the PLANNING OF MANUAL PURCHASING schedule, you must enter a positive manual inventory change of $ 500 in April 2018. Yes, you sell your product in October but you must buy it 6 months in advance, in April . You will then see your "Inventory Level" balance increase to $ 500 as of April 2018;

  • Then, you must enter a negative $ 500 manual inventory change in October 2018 to reduce your inventory level to $ 0 (as you sold these products in October 2018);
  • For the payment term, you must enter the same payment term as for your product. In this case, 30 days




Here's how the transaction will be counted in BUDGETO:

  • With a 30-day payment term, BUDGETO will disburse $ 500 inventory 30 days after the April 2018 manual positive inventory change. The supplier payment will be made in May 2018. If you had chosen 60 days, the payment would have been made in June 2018;
  • In the same vein, the system will cash $ 500 in November 2018 for the manual change of negative inventory of October 2018. This cashing will cancel the disbursement of $ 500 automatically generated by BUDGETO at the time of sale, thus the impact on the cash budget for the month 11 will be $ 0.