Unless you are extremely careful, you will not realize how many extra dollars you spend without good control. Please listen carefully to your accountant.
Here are a few hints that I learned after many years “behind” the counter:
Maintaining a minimum inventory, and a timely sending of purchase orders can leave a lot of extra dollars on the bottom line.
When the delivery vehicles deliver your order, please be sure that none of the boxes are damaged. If they are, have the driver sign that this happened. If you are responsible for the freight, be sure it is correct. USP rates and other rates are easily found!
Study carefully each invoice for merchandise ordered. Check that the quantities received are correct and then see what the terms are. Invariably they are 2%, ten days, net 30. The 2%, 10 days, adds up to many dollars every year; make sure you earn them.
Purchasing is a fine art. You should always make every attempt never to stock more than a 30-day supply of any item. The temptation is always there to buy larger quantities and earn an extra few percent discount. Trouble comes when you get out of a 30 day inventory control; you may not have the dollars available for the 2%, and so in the long run, you lose. By buying cautiously when a new product or opportunity appears, you will be able to afford it!
Items that turn over very rapidly should also be purchased as they are sold. Your accountant will show you how often to place orders. Usually, if it takes 3 or 4 days until they are received, place the order when you are down to a five-day inventory.
Allow your purchasing agent to spend time with your accountant. I have attended many talks on buying and inventory control. I know there is a large amount of money at stake. However, I also know that when inventory and accounts payable are controlled you will exceed your goals.