🇦🇺Australia

Obsolete Inventory Write-Downs

2 verified sources

Definition

Failure to promptly identify and liquidate obsolete inventory results in ongoing storage, insurance, and capital tie-up costs, plus GST adjustment errors during BAS lodgement.

Key Findings

  • Financial Impact: AUD 20,000-100,000 per year in holding costs and write-downs for mid-sized wholesalers (2-5% of inventory value)
  • Frequency: Quarterly during BAS cycles
  • Root Cause: Manual inventory checks and slow auction consignment processes

Why This Matters

The Pitch: Wholesale Motor Vehicles and Parts players in Australia 🇦🇺 waste AUD 50,000+ annually on obsolete inventory holding. Automation of identification and auction liquidation eliminates this risk.

Affected Stakeholders

Inventory Manager, Finance Controller, Warehouse Supervisor

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Inventory Shrinkage in Liquidation

AUD 5,000-20,000 per auction event in shrinkage (1-2% of liquidated value)

GST Errors on Liquidated Stock

AUD 2,220 base penalty per BAS error + 25% shortfall penalty (ATO standard); 20-40 hours/month manual reconciliation

Delayed Accounts Receivable Payments

AUD 3,000 per average invoice tied up (30+ days); collections agency fees post-7 business days overdue; storage fees for delayed delivery (e.g., 7+ days at reasonable rate)

AR Collections Agency Costs

Collections agency fees (typically 10-20% of debt value) after 7 business days overdue; e.g., AUD 300-600 on AUD 3,000 invoice

Storage Fees from AR Delivery Delays

Reasonable storage fees per vehicle (7+ days, e.g., AUD 50-200/day based on industry norms)

Core Charge Return Warranty Disputes

AUD 5,000-20,000 per major dispute; 2-5% of parts revenue in refunds/rework

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