Inventory reporting for better business decisions
Inventory reporting is part of any business dealing with some kind of stock movement. Learning how to do it efficiently can save you a lot of time and effort.

Are you unsure of what to do with your scrap items in inventory? Fear not, with the right strategies, you can turn that mess into money. This article will look into scrap inventory and the best ways to manage it.
Suppose you’re a furniture manufacturer. You’ve been in the business for several years and established a good brand image. Most of your products fly off the shelves, but some nightstands are slowly morphing into dead stock.
One day you check your orders and notice someone has purchased one of those nightstands.
You head over to your stock room, climb on a ladder and start wiggling down the item, so you can clean it, package it, and send it to its new home. But as you’re about to grab it with both hands, you lose your balance and drop the nightstand to the ground.
For a brief moment, you consider purchasing a taller ladder but quickly forget about it and start assessing the dropped item. You notice that it has some unrepairable damage.
This nightstand has now become scrap inventory.
Scrap inventory refers to goods or materials that are no longer usable or sellable in their current form, and are typically intended for disposal or recycling. This type of inventory may include defective products, damaged goods, or excess materials no longer needed for production.
Scrap inventory is usually recorded separately from other types of inventory and may have a lower or zero value in accounting records. Companies may try to minimize scrap inventory by implementing quality control measures or recycling programs to reduce waste and save costs.
Scrap inventory needs to be recorded for several reasons:
Overall, recording scrap inventory is important for financial, operational, and environmental reasons, and can help businesses to improve their efficiency and profitability.
Inventory scrap can come in various forms, each with its unique characteristics and challenges. Here are some common ways that can create scrap items in inventory:
Each type of inventory scrap requires different management strategies to minimize waste and prevent financial losses. Companies may turn to production quality control checklists, inventory management systems, and efficient supply chain management practices to reduce inventory scrap and improve profitability.
When it comes to accounting, scrap inventory is often overlooked. But it can be a significant drain on a company’s resources if not managed properly. When scrap inventory is not adequately accounted for, it can lead to inaccurate financial statements and ultimately affect the bottom line of the business.
To effectively manage scrap inventory, accounting professionals must clearly understand the company’s inventory management system. They should be able to identify the types of scrap inventory the company generates and determine the most effective disposal methods. Accounting professionals should also work closely with other departments, such as production and procurement, to ensure proper procedures are in place to minimize scrap inventory and maximize the company’s profitability.
By ensuring that scrap inventory is accurately accounted for and managed, companies can minimize waste and increase profits, improving their overall financial health.
Managing inventory scrap can be challenging for several reasons. Some of the common challenges with scrap inventory management include:
Overall, effective scrap management requires a comprehensive approach that involves identifying the causes of scrap, implementing cost-effective measures to reduce it, and maintaining accurate records to monitor and analyze trends.
You’ve done your best to minimize scrap inventory but can’t eliminate it completely. The next best thing to do is to manage it well.
Katana’s cloud manufacturing platform has the features you need to get not only your scrap inventory but also your raw materials, finished goods, and manufacturing processes under control.
With Katana’s real-time inventory management, you can identify any excess inventory immediately and make adjustments on the fly. And with its built-in analytics, you can monitor sales performance and predict future demand to keep your production running optimally.
What’s more, Katana offers seamless integrations with the best business tools out there, like QuickBooks Online, Xero, Shopify, and BigCommerce, making it easy to keep your information synchronized across the platforms. This eliminates the need to manually transfer data between different systems, saving you a lot of hours.
Get your scrap under control with Katana — try it out today by signing up for a free 14-day trial.