
Inventory items refer to the tangible goods or assets used by a company to support its daily operations. These items can include equipment, furniture, computers, appliances, and other goods with a useful life of more than one year. Effective management of these assets is critical for ensuring operational efficiency and the long-term success of any organization.
Importance of inventory management
Effective inventory management offers several benefits for an organization:
- Operational efficiency: Proper tracking and management of inventory ensure that essential goods are available when needed, supporting seamless operations.
- Cost control: Good management helps avoid unnecessary purchases and reduces losses from damage or theft.
- Budget planning: Accurate knowledge of the value and condition of inventory aids in budget planning and resource allocation.
- Compliance and auditing: Maintaining a precise inventory record is essential for legal compliance and preparing for financial audits.
Types of inventory items
Inventory items can be categorized into several types based on their nature and use:
- Equipment and appliances: Includes all devices and machinery used in daily business operations, such as computers, printers, scanners, production equipment, and specialized tools.
- Furniture: Comprises desks, chairs, cabinets, shelves, and other furniture essential for creating a functional and comfortable workspace.
- Vehicles: Refers to company-used vehicles like service cars, delivery trucks, or other commercial vehicles.
- Safety and protection equipment: Includes all items necessary for ensuring employee safety, such as fire extinguishers, fire alarms, personal protective equipment, and other safety devices.
- Office supplies and consumables: Covers all materials required for office work, such as paper, pens, printer ink, and other similar products.
Inventory management process
Managing inventory efficiently involves several essential steps:
- Identification and cataloging: The first step is to identify and catalog all inventory items. Each item must be recorded in a tracking system with a unique identification number, including details such as the description, purchase value, acquisition date, and location.
- Labeling and marking: Each inventory item must be labeled appropriately for easy identification and tracking. Labels may include barcodes, inventory numbers, or other unique identifiers.
- Monitoring and updating records: It’s crucial to continuously monitor the condition and location of inventory items and update records when changes occur.
- Periodic auditing: Regular audits help verify the accuracy of inventory records and identify discrepancies.
- Disposal and decommissioning: When inventory items become obsolete, a formal process of disposal and decommissioning is necessary, which includes approvals and documentation.
Technologies for inventory management
Modern technologies can simplify inventory management processes. Useful technologies include:
- Inventory management software: Specialized software solutions can track inventory in detail, provide real-time updates, and generate reports and analyses.
- Barcodes and RFID: Barcodes and RFID technology enable quick and accurate identification of inventory items, making tracking easier.
- Warehouse Management Systems (WMS): Advanced WMS solutions help optimize storage space and manage the flow of goods within a warehouse.
Accounting for inventory items
In accounting, inventory materials are managed through specific accounts as outlined in OMFP nr.1802/2014:
- 303 – inventory materials: Records the acquisition of inventory items.
- 323 – inventory materials in progress: Tracks inventory items being acquired but not yet received.
- 603 – expenses for inventory materials: Records when items are put into use.
- 8035 – off-balance inventory account: Tracks inventory in use for asset verification purposes during audits.
Difference between inventory items and fixed assets
The main differences between inventory items and fixed assets are:
- Duration: Inventory items are held for less than a year, while fixed assets are held for more than a year.
- Value: Inventory items typically have a value under RON 2,500, while fixed assets exceed this amount.
- Depreciation: Inventory items are not depreciated, whereas most fixed assets are.
Disposal of inventory items
When inventory items are no longer usable, they must be disposed of through a proper process, which typically involves evaluation by a dedicated committee and documentation in the form of a “Decommissioning Report.” In accounting, the decommissioning is reflected by crediting account 8035.
Environmental and legal considerations
Disposing of inventory items often requires working with a licensed waste management company, especially if the items involve hazardous materials or need recycling. Additionally, tax regulations must be followed to avoid adjustments to VAT and ensure compliance with environmental laws.
By partnering with Kaputt Sekuro, companies can ensure the secure destruction of obsolete assets, protect their brand reputation, and comply with environmental regulations. Our expertise in sustainability, combined with ISO-certified processes, makes us a trusted partner in asset disposal and inventory management.
Removal of non-salable inventory from accounting records
Expenses incurred for removing degraded goods from accounting records are tax-deductible when calculating corporate income tax.
VAT adjustment for non-salable inventory
According to current legislation, services paid to a recycling company for the destruction of goods are fiscally deductible.
Integrated waste management
We offer comprehensive and specialized solutions for the collection, disposal, and destruction of expired, damaged, counterfeit, confiscated, non-compliant, or specially regulated products.
Collection of electrical and electronic equipment
We provide integrated solutions for the efficient management of household and electronic waste, ensuring specific treatment for each category.
Why Choose Kaputt Sekuro
Disposing of inventory item assets is a complex but essential process for the efficient management of an organization’s resources. By following clearly defined steps—such as inventorying, evaluating, selecting the disposal method, and documenting the process—organizations can ensure responsible and compliant management of their assets. Proper disposal brings numerous benefits, including financial savings, risk reduction, enhanced safety, and environmental protection, all contributing to the long-term success of any organization.
With 15 years of experience in the sustainability industry, Kaputt Sekuro provides comprehensive management of fixed assets through secure destruction, preventing resale and safeguarding brand reputation.
At Kaputt Sekuro, the work we do is more than just a job. It’s a commitment and responsibility towards the environment and our clients, who understand the importance of protecting their brand and consumers.
All of Kaputt Sekuro’s processes adhere to ISO 9001 and ISO 14001 certification standards, as well as international factory production certification standards, ensuring that our secure destruction services are thoroughly monitored, both internally and by independent third-party auditors.