Tracking Internal Inventory

Many of the associations I have consulted with over the years have inventoried products that they sell or give away to their members and customers. For those that are selling products, keeping track of these sales is a pretty straightforward process: the customer buys the product, the invoice and sale is tracked in the AMS, and if there is inventory tracking associated with that, then the inventory is decremented in the appropriate amount.

But what about when staff uses the inventory for association needs (e.g., giving away product when exhibiting, or providing samples to prospective members)? This inventory should be tracked and “sold” via the AMS just like a “normal” sale, but with the association as the customer and a price of zero dollars.

For example, long ago at one trade association I worked for, we sold a printed directory with a price of $750. (This directory information is now free on the internet, but that’s a different story!)

This directory was also commonly given away to prospective members or to visitors to the office, or for other reasons. But because the directory had a value of $750, we had to keep them in a locked cabinet and staff had to request to receive complimentary directories, which we then processed as a zero-dollar order in our AMS.

The benefits of this process were twofold:

  1. We were tracking all inventory used, so reconciliation was easier.
  2. We were tracking how much of our inventory was used for “non-sales” activities, which was important for understanding how the inventory was being used, how we priced it, and how much we printed every year.

A few of my clients have inventory that is free to any member who requests it. But these “orders” are still managed as orders within the AMS because it’s important to the association to know how many orders are being received and where the inventory is going, even though there is no actual price associated with the products.

So if you’ve got inventory of any substantial value or amount, and some or all of that inventory is going out the door for free, you should be tracking those “zero dollar sales” just like any other product order.

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