I'm still at a loss on how you have channel stuffing while reducing inventory.
I don't really think a discussion on channel stuffing is justified, but, if one wish to stuff one's channel, then one has to have an accounting system which books a sale event at the time the product 'leaves the dock' or is shipped, without proper accounting controls. On the occasion when one wishes to stuff one's channel, one takes a manufactured good out of inventory, thereby reducing inventory and send it to a distributor who may or may not wish it.*
And, let me hasten to add, channel stuffing only works for one quarter in a row. The next quarter, if you channel stuff the same amount, you will get a very true representation of the sales for that quarter. If you don't channel stuff, then reported sales will be LESS than actual. All that is required is consistancy of treatment from quarter to quarter, whether you call it "channel stuffing" or not.
:))
*see Miniscribe Corporation |
