Q:

Who is responsible for excess inventory?

A:

Quick Answer

Accounting managers are responsible for excess inventory, as noted by Chron Small Business. When there is too much inventory on hand or when inventory becomes obsolete, the accounting team may need to prepare an entry to write the items off of the books and records.

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Full Answer

Excess inventory becomes detrimental to a company when the items on hand cannot be sold at market price, as noted by Chron Small Business. In some cases, it is worthwhile to sell at a discount, but even this approach can result in a business loss. Timing is also critical when considering excess inventory, as the result of the corresponding journal entry can have an impact on financial statements. For instance, an accounting manager may be inclined to delay writing down obsolete inventory in order to inflate earnings figures over a particular period.

Individuals and businesses can take measures to address excess inventory, as listed by Business Insider. Excess inventory can be sold online, offered in bulk, bundled with other products, gifted as a customer reward or donated for marketing purposes, as of March 2015. However, certain inventory may expire and should be discarded completely. For instance, a store owner may have excess inventory related to dairy products. Any items that surpass the expiration date should be discarded immediately.

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