Director of Marketing, SortlyShahzad Karachiwala
Is there a difference between inventory and stock—or are the words interchangeable? There is a difference@ Learning what the terms mean will help you accurately account for the items your business owns and uses. And capturing the details in your inventory system can help you streamline business processes and get an edge on the competition.
Stock items are the goods you sell to customers. Inventory includes the products you sell, as well as the materials and equipment needed to make them. Although the definition of stock is concise, there are four main types of inventory: raw materials, work in progress, MRO supplies and finished goods.
Stock includes finished products, parts, materials—whatever you sell to customers. The more stock—or products—you sell, the more revenue your business generates.
Inventory includes finished products and all the assets a business owns or uses to complete production. There are four main types of inventory.
Raw materials are parts or components used to make a final product. For example, if your company manufactures HVAC parts, the raw materials used to make fan motors, compressors, or thermostats might include:
Work-in-progress, or work-in-process, inventory is still in production. Some examples are incomplete goods that require time to dry, seal, bond, or ferment before they are ready to be packaged and sold. And WIP includes raw materials, labor, overhead, and other essentials needed to complete production.
Items that support production but are not part of the finished product are MRO supplies. For example, if you’re tracking medical inventory for a company that manufactures continuous glucose monitors, production might be supported with these MRO supplies:
Finished goods are completed products that are packaged and ready to be sold.
As demand for stock grows, or as stock levels decrease, raw materials and MRO supplies must be available for production. How can you manage and track your stock and four types of inventory?
Introducing Sortly—easy-to-use, intuitive inventory management software that tracks stock and inventory, so you know what to order, how much to order, and when to order it.
Sortly automates inventory control with a bundle of features:
Manage your inventory more intuitively with Sortly’s inventory management software. Get started free!