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Every company whose business involves the management of stock should be familiar with inventory-related terminology. Some of the many terms include: active stock, aisle, ATA, ATD, backorder<\/a>, barcode, SKU, blind receiving, 3PL, 4PL, buffer stock, ending inventory, cargo, cross-aisle, consolidation, cross docking<\/a>, cycle count, DDP, DSD, EAN, FIFO<\/a>, LIFO, fixed slot, inventory system and more. Beginning inventory<\/strong> is arguably one of the most important of these concepts.<\/p>\n <\/p>\n In this guide, we\u2019ll help you understand:<\/p>\n The beginning inventory calculation<\/strong> is vital for those companies with warehouses of any size. Starting a new month with more inventory in hand than the month prior? This might be the best course of action if you\u2019re preparing for a big sales campaign or the mad rush of Black Friday, Cyber Monday, and the whole holiday season. Starting the month with less stock than when you started? This is good news if special promotions are over or you expect demand to decrease. However, without accurate beginning inventory calculations, you\u2019ll be managing warehouse inventory levels by feelings instead of by fact.<\/p>\n The term “beginning inventory” is simply the number of products in stock at the start of an accounting period. Different businesses will, of course, count inventory in different ways. If you\u2019re stocking items such as shoes or shovels, you probably count in simple units. If you\u2019re dealing in raw materials such as gravel, bark dust, and the like, you\u2019ll count in unit quantities such as weight or volume. Or you might be dealing with more complex inventory such as both assembled computers and their component parts. Whatever the case, it\u2019s important to count the same item types the same way every time you take inventory. The next step is to put those accurate counts to use in making smart business decisions that ensure smooth ordering and fulfillment operations. This is where the beginning inventory calculation<\/strong> comes into play.<\/p>\n\n
What is Beginning Inventory?<\/h2>\n
How to Calculate Beginning Inventory<\/h2>\n