Reccomendation report

Topics: Inventory, Cost accounting, Cost Pages: 4 (965 words) Published: November 22, 2013

Recommendation Report

Vision Centre
Date; June 15, 2012
TO: Mr. President
From: The Chief Accountant Subject: A Perpetual Inventory Costing System

I am submitting this report detailing my recommendation for improving the productivity of the company, and to cope with every day demands. As we proceed with the opening of a new eyewear department, one needs to have a strong understanding of the current business environment and its needs. In other to explain deeper how we can be the most successful company, this standard report will be my main communication tool. My recommendation is based on my own experience and my interview with other department management. If Vision Center is expected to grow rapidly and increase its level of inventory, a modern solution may be put in place to assist with this daily endeavor. For this reason, I am therefore strongly encouraging you Mr. President to install a new perpetual inventory system.

A perpetual inventory system is a set of accounting processes that helps a company report financial inventory data. Many companies use this system, especially those using a job order cost accounting system, or selling many different types of inventory. Mr. President, a perpetual costing system will be the framework of processes and procedures used to ensure that the company fulfill all tasks required to achieve its objectives. Businesses today are introducing this system which manages all their complex transaction. Although, Vision Center has been successful thus far without having the Perpetual inventory system, however to promote the longevity of the company it would be in the company’s best interest to implement the perpetual inventory costing system.

The Perpetual inventory system records each sale of merchandise and places an entry in the...
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