We all understand that too much inventory can tie up cash. To help improve cash flow while keeping enough inventory to fulfil orders, many companies use a turnover report to see how much cash they have invested in their inventory. This report can also review items in stock to help answer many questions, including some of the following: Are these items selling? Are they selling regularly throughout the year or more seasonally? Should we try to discount them to clear them out of the inventory and generate cash flow? Are the items with expiration dates selling fast enough to prevent write-offs and returns?
This report was built for a distribution company that sells food items. Although all the food items they sell are prepackaged with a long shelf life, they want to keep the product on their shelves for the shortest period of time they can so that their customers can keep them for a longer period of time.