Fiducia TogetherInventory management
Deciding how much stock to hold, and when to order more.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Inventory management balances the cost of holding stock against the cost and risk of running out.
Why it matters
Stock is cash on a shelf. Too much ties up working capital and risks obsolescence; too little loses sales and disrupts production.
What it looks like in practice
Reorder point is average demand over lead time plus safety stock. ABC analysis ranks items by value so attention goes where the money is.\n\nJust-in-time minimises holding and maximises exposure to supply disruption — a trade-off that looked very different after 2020.
What to watch out for
Ordering on gut feel and on supplier discounts. A bulk discount that ties up six months of cash is rarely worth the percentage.
Where to get proper advice
Your own stock turn by product line. Inventory software pays for itself above a few hundred lines.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.