Inventory management and tax regime selection: key aspects for small and medium-sized businesses

Relevance. With the growing tax burden on small and medium-sized businesses, it is necessary to consider various tax accounting methods and inventory management systems to identify problem areas and subsequently optimize business processes.

Aim. A comprehensive study of the inventory management system and analysis of applicable tax regimes using a simulated small business entity as an example to identify key relationships and problem areas and develop practical recommendations for optimizing accounting, minimizing the tax burden, and increasing the overall financial stability of the business in a dynamic market environment and changing legislation.

Materials and Methods. The methodological framework utilized methods of systemic, comparative, financial management, ratio, SWOT, and average cost analyses.

Results. Аnalysis of the simulated sole proprietor’s operations revealed effective inventory management, as evidenced by a high turnover ratio. The chosen tax strategy is optimal. A SWOT analysis identified factors that threaten the simulated entity’s operations. The key threat is the planned increase in fixed insurance premiums starting in 2026.

Conclusion. The study showed that a system for accounting and analyzing inventory movements based on the average cost method enabled the company to achieve high inventory turnover, minimize storage costs, and reduce depreciation risks. The use of a simplified tax system for wholesale operations and a patent system for retail trade in the current environment ensures an acceptable tax burden and reduces administrative costs through simplified reporting.

To maintain and improve the efficiency of individual entrepreneurs, it is necessary not only to maintain current effective inventory management practices but also to actively implement analytical tools for demand forecasting, diversify suppliers, and regularly assess the suitability of the chosen tax system for changing economic conditions and their own operating performance.

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