Tips for Managing Perishable Inventory Management

Inventory Management
Read Time: 3 mins

Perishable Inventory management demands attention. There are certain best inventory tracking software methods that help with the operation of managing and accounting for perishable inventory. Any manufacturer or retailer of food and beverage products, cosmetics, pharmaceuticals, nutraceuticals, or anything that has an expiration date will be very much familiar with this issue. The major pinpoints are guaranteeing the sale of inventory before its expiration date, and the ability to effortlessly recognize and eliminate expired inventory.

How companies can utilize inventory management systems and demand forecasting to lower inventory carrying costs and sell their perishable goods before they expire.

The global pandemic increases the need for good perishable inventory management. Afraid that they wouldn’t be able to fulfil orders during the crisis, companies stocked up on their fast-moving products and supplies.

With the world’s supply chains beginning to normalize, it’s time to take stock of the goods sitting in storerooms and warehouses specifically those items whose storage life may be coming down to the wire. Critical because these lose their value over a period of time until rendered worthless, perishable inventory management should focus on selling those goods before they expire. 

Putting the Right Systems in Place

Accounting for Perishable Goods

Most of the operations are about being able to make supply and demand meet. This can be difficult with certain business models that sell perishable goods and has an expiration date. As an outcome, managerial accounting has come up with methods for recognizing inventory for those goods. Perishable goods that may have no value after a period of time can be difficult for managers to track; however, the single-period inventory control system can help to lower many issues involved with automatically replenishing inventory storage when it’s down.

Automatic Inventory

The best advantage about an inventory management system is that it automatically orders goods when supply is low is that it’s efficient, and you won’t ever miss a sale. The disadvantage of an automatic inventory management/ordering system is that you may order too much inventory. If the inventory is perishable, it has a definite period of usage and business owners need to pay closer attention to inventory demand cycles than non-perishable business owners.

Single-Period Inventory System

The single-period inventory system presumes that you only order enough supply for one period. After the supply from the original order is gone, you do not replenish the supply until revaluate the level of demand. For example, if you order 200 apples to sell over a five-week period, and they all get sold out in the first two weeks of business, you will wait until the end of the accounting period to order additional apples. This system will limit the amount of inventory that can damage, go bad or be otherwise obsolete.

FIFO Inventory Valuation

An effective perishable inventory managing process helps you to eliminate the need to write off large amounts of obsolete inventory and boost net earnings. The cost of perishable goods sold is expenditure on the income statement. Inventory that is unsold is valued on the balance sheet as a current asset. FIFO inventory valuation presumes that the first inventory purchased is the first inventory sold. This is the best valuation method to use for perishable inventory, and in periods of rising inventory prices, it is a strategy that helps to boost net earnings and asset size.


Regardless of which approach companies uses, its perishable inventory management should also incorporate product batch numbers, traceability, recalls, and obsolescence, all of which can be used to ensure the sale of inventory before its expiration date. When integrated with a warehouse management system (WMS), inventory management systems provide high levels of visibility overstock that’s nearing the end of its shelf life. This, in turn, helps companies fine-tune their perishable inventory management processes. 

Goods Order Inventory System with knowledge and expertise in managing the perishable inventory can help you design a customizable inventory management system that will enable you to optimize the handling and sale of perishable your outlets.

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