Picture a textile wholesaler with bolts of fabric that have not moved in three months. The money paid for that stock is still sitting on the shelf, invisible. The inventory list lives in an old ledger or a spreadsheet full of outdated figures. In a period when the local currency can lose a significant chunk of its value in days, not knowing what is in your warehouse is a real danger. This is precisely where Navision, an integrated accounting and stock management program, earns its place.
Navision connects stock records directly to accounting entries inside a single program. When goods arrive at the warehouse, the stock card updates and an accounting entry is created at the same time. There is no need to maintain two separate sets of records. The quantity on hand, the date of receipt, and the cost at the time of purchase are all visible on one screen. Before this kind of software, the warehouse keeper kept one notebook and the bookkeeper kept another. When the two figures did not match, sorting out who was right could take hours.
The stock valuation feature of the program becomes especially useful when the exchange rate moves sharply. You can choose between FIFO (first in, first out) or weighted average cost as your valuation method. Which method you pick has a direct effect on your profit and loss figures. If you imported goods at one rate and the rate has since changed, are you valuing that stock at the old cost or the new one? Get this wrong and your tax base is wrong too. Navision handles the calculation automatically once you decide which method to use.
Dead stock is a problem that turns painful very quickly during a downturn. Dead stock is merchandise that has not sold and sits taking up space. The money to buy it has already left the business, but nothing is coming back in return. On top of that, warehouse rent, insurance, and the risk of spoilage or obsolescence keep adding up. In Navision, you can see the date of the last movement for every stock item. Listing products that have had no outgoing transaction in the past three months takes a few minutes. A business owner holding that list can make a fast decision: mark it down, sell it, turn it into cash. In a cash crunch, liquidity matters more than margin.
Another practical feature is the minimum stock level setting. You can define a threshold for each product and the program warns you when stock falls below it. This sounds simple, but it prevents a common and costly mistake: discovering that an item is out of stock only when a customer order arrives. At that point you lose the sale and often end up buying in a hurry at a worse price. With advance warning, you can negotiate with your supplier calmly. When the product is imported and the exchange rate is unstable, the difference between a planned purchase and an emergency purchase can be significant.
Setting up the program and keeping it running correctly is not straightforward. The first step is entering the current stock list accurately, and that job alone can take several weeks. Errors in the initial data lead to wrong reports later on. You also need a qualified local dealer to handle installation and provide training. Outside of Istanbul and Ankara, finding reliable support is not always easy. There is another ongoing requirement: the physical count in the warehouse must be reconciled with the program records on a regular basis. The software does not fix itself. Without people entering data correctly and consistently, the reports mean nothing.
Any business owner thinking about moving stock management to a computer program should start with three questions. How much stock do you currently hold? How much of it has not moved in more than three months? And what is the total cost of that idle merchandise? If you cannot answer those questions today in a matter of minutes, a stock management program deserves serious consideration. Navision is one option that handles this work. The upfront cost may look high for a small business, but when you calculate how much cash is tied up in slow-moving or dead stock, the arithmetic often looks different.
This article was originally written in Turkish by Gökhan MERCANOĞLU on February 12, 2001 and has been automatically translated into English and other languages using machine translation.