Here we will talk about what is inventory and how to manage it easily.

What is Inventory?

Inventory refers to a list of the goods that are available with the businesses for the purpose of sale. It is also known as stock. Inventory is classified as an asset in the balance sheet, as it generates income once the goods are sold. It is also considered as merchandise, which refers to items that are kept by businessmen for sale in the future.

This explains why inventory is important for any business and how managing the same is one of the necessary actions to have a successful run.

Importance of Inventory in Business

Let us try to understand with a simple example about the importance of inventory management.

Gupta ji runs a grocery store and always tries to keep his customers happy. He makes it a point to keep all the items required by the customers in his shop. However, at times he forgets to order some items, due to which his customers have to return empty-handed. This often has a bad effect on his business. It could’ve been easily avoided if Gupta ji had paid attention to the inventory of his shop and ordered the remaining items.

This is the reason why inventory is important for everyone from small businesses to large businesses. If it is not managed properly, then it may have a negative impact on the business, and the trust of customers is also compromised.

Purchase orders are created to manage inventory. Let us now know what a purchase order is and why it is useful for inventory.

What is a Purchase Order?

A list of items to be ordered from a vendor is called a purchase order. Suppose Gupta ji makes a list to order shortage items like pulses, oil, sugar, salt, soap in a grocery store mentioning the quantity required. This particular list of Gupta ji is what we call a purchase order. Now Gupta ji can place the order to the vendor with the help of this list.

Use of Purchase Order in Inventory

A purchase order is an essential part of inventory management. If one wants to manage his/her business inventory, then he/she has to create a purchase order for it which will help him/her to manage the inventory properly.

This is a digital age and the majority of work is done digitally. It saves a lot of time and reduces the chances of making a mistake. You can stop creating purchase orders on paper and instead use OpenBook to create the same through your smartphone. You can then send the purchase orders to vendors through WhatsApp, SMS, or email. This will help you manage your inventory super easy and the biggest advantage here is that you can make the payment immediately from OpenBook itself.

Let us also inform you that OpenBook provides a digital business bank account to simplify your business finance management. You can do billing, banking, accounting, and tax — all of it in one place. OpenBook also notifies you about low stock information for you to manage the stocks without facing any shortage.

So don’t wait. Download OpenBook and #BusinessKaroSimple

In this blog, we will know in detail how estimates help small and micro businesses in managing their business better. But let’s first understand.

What are Estimates?

An estimate or quotation as popularly known in the Indian market is a business document that provides an approximation of the product and its price. This is used by most businesses for their potential customers so that both parties are aware of the product offerings. 

For example businesses before giving an actual invoice provide this estimate/quotation with the product name, quantity, and price of the product in it. So eventually customers can make purchases based on the estimate provided.

Benefits of using an Estimate

Here are 5 benefits on why small and micro-businesses should create and provide their customers with estimates:

1. Build better customer relationships: Estimates provide even minor details about the product and items involved along with their prices. This is something that both business owners and customers agree upon, thus building transparency and integrity.
2. Easier in managing inventory: Based on the requirement of the product from the customer, business owners can make sure the availability of items at the time of delivery. This also helps in maintaining the quality of the products as promised by the business owner.
3. A better understanding of the budget: The estimates provide a better understanding of the budget for any particular sale. Cost price, sale price, discount, profit, etc becomes quite clear for businesses before doing the actual transaction.
4. The clear expectation on delivery dates: For any business keeping one’s word is important, thus the estimate also provides the customer’s expectation in place. Helping them towards delivering at the promised time.
5. Helping in informed business decisions: All this information can help a business owner understand in detail how any sale can give them profit. This also gives insight into the availability of the product to deliver at the given date. So accordingly can go ahead with the business transaction or not.

Create Estimates easily on OpenBook

OpenBook understanding the requirements of micro and small businesses has brought everything that your business needs. From billing, banking, accounting, taxes, and more all at one place. It’s a really simple process to create an estimate on OpenBook.

Steps to create an estimate:

• Click on the estimate icon on the OpenBook dashboard
• Add party name
• Select item 
• Mention the amount and any additional details
• Save and send it to the customer

See it takes less than 2 minutes to create an estimate on OpenBook. Now that you have understood the importance of estimates and how they can benefit your business.

What are you waiting for?

Download OpenBook app today and #BusinessKaroSimple. 

It is an integral part of business finance for any business. In most cases, it is a proof of business transaction as in which product or services were bought from which vendor. Let’s understand in detail how important a Purchase bill is for any business.

What is a Purchase Bill?

A purchase bill is a record of any business-related purchases by any business from any vendor. It has details of the item/product/services bought along with the payment details such as any advance paid or credit given to the buyer. Often it is also called vendor sales bills/invoices as it is a bill for any purchases from vendors. 

What elements are a must for a Purchase Bill?

• Details of party & vendor
• Details of items
• Quantity of items purchased
• Purchase date
• Purchase price & any discount offered
• GST or TDS involved
• Payment details
• Terms & conditions

Why is Purchase Bill important for any small business?

It is very important for any small business to have purchase bills for any business transactions. This is an integral part of business finances. Without this, it would be difficult to keep track of expenses for any business. Here are some benefits of having a purchase bill:

1. It is proof of purchase of any product or services
2. Also, this helps in keeping track of payments
3. Additionally, it also helps in managing and settlements of accounts

Although knowing how important a purchase bill is, often most businesses especially MSMEs ignore it. Eventually, this becomes a nightmare for any accountant to manage the business finances. Another mistake that businesses do is by making paper bills which have a high chance of getting lost or damaged. This again will create big trouble in managing business finances.

We are moving towards digitization which eases the way of managing a business. Thus it is important for businesses to opt for digital versions of these Purchase Bills.

How making a Purchase Bill is simple on OpenBook?

OpenBook understands the need for 6.6 crore micro & small businesses in India.

Small businesses can create purchase bills to record items being paid. They can either save the purchase bill or can pay directly. Businesses have the option of paying at the time of creating. Payment can be made through NEFT, IMPS, or UPI.

Alternatively, businesses can record a cash payment. At the time of creating the bill, small businesses can enter any cash they have already paid to the party so that only the remaining amount will be marked as due.

Create a purchase bill on OpenBook in 3 simple steps:

• Enter the party name
• Select the items
• Add the billing amount

It’s that simple. The best part is that this will automatically reflect in your accounting. Additionally, when you pay for this purchase bill, it gets auto-matched. And this is what we mean when we say #BusinessKaroSimple.

Use all this time saved in managing business finances to work towards growing your business to the next level.

What are you waiting for? Download the OpenBook app today and #BusinessKaroSimple.

Let’s try to understand bills and sales invoices a bit better. 

Here’s a list of details that every invoice should have:

1. Name and address of the seller 
2. Name, contact number, and address of the customer 
3. Item name & quantity 
4. Price of the item and if any discount is given 
5. GST and TDS as applicable
6. Payment options and details 
7. Terms and conditions as required

Phew! Now that’s one long list. 

But why are sales invoices and bills so important for businesses?

1. It is proof that a transaction involving the sales of a service or item has taken place
2. This helps you keep track of payments by allowing you to set the terms of payment 
3. It helps in the accounting and auto-matching of the accounts

Despite the fact that sales invoices and bills are of such importance, they are often ignored by most businesses. For the longest time and even in today’s digital age, most businesses still use paper bills. The most saddening part is that a lot of businesses use rough bills with ink and paper. So imagine if you lose a copy – what will you do then?

A lot of businesses have started using various digital invoice makers, but is it solving the problem completely? Not exactly. Businesses still spend hours on accounting or reconciling payments for these bills. This time could otherwise be used in growing their business.

So, what is the solution?

OpenBook simplifies invoicing and billing like never before

With OpenBook businesses can now manage everything related to business finances in one app in just a few clicks. Isn’t this amazing? It allows small and micro-businesses to easily create GST-compliant sales invoices. You just need to add the details of the party, the details of the item to be sold, and the price of the item. And that’s it. You can now send this digital invoice to your customers or parties. 

The best part is that this will automatically reflect in your accounting. You can even send reminders to your customer for payments. Adding on to that, when the customer pays against the invoice using their preferred method of payment, it gets auto-matched. And this is what we mean when we say #BusinessKaroSimple .

Use all this time saved in managing business finances to work towards growing your business to the next level.

What are you waiting for? Download the OpenBook app today and #BusinessKaroSimple.