Gross pay is made up of the net amount paid to each employee plus all withheld amounts. Besides payroll ledgers for each employee, the payroll system usually also produces various payroll reports useful in satisfying liabilities for withholdings. If accounts receivable age without being collected or if inventory grows with large quantities sitting on shelves unsold the business will soon see profits dwindle or disappear. Maximum profits occur when the proper amounts are ordered at the proper times and prices are set properly to maximize profits. Either not having the item to sell or stocking too many unsold items will decrease profits.
Inventory control is essential for businesses that sell large quantities of retail goods.
Inventory control accounting is more difficult and takes more attention to detail than other accounting subsystems. It is also essential that a system of reconciling accounting system inventory figures to real-world information through a periodic physical inventory be in place. Last revised November 26, 1999. Please send comments. All rights reserved.