Why is it important to organize business inventory?
Your company will have more stock to sell if you follow good Inventory Management practices. You can easily see which items are the best sellers and those that do not sell well. Tracking helps you manage your inventory, knowing exactly what is on hand to use for marketing, calculating proportions, and preventing theft and over-ordering.
A well-organized stock can also help you prepare for the expected sales boost.
Inventory software: Eight essential features
If you are looking for the best inventory management software program for your business, it should meet the following eight requirements:
- Reduce costs. Avoid spending money on inventory that you do not need. Your Cash Flow and Bottom Line of your company will improve.
- Track your inventory in real-time You’ll be notified every time you lose stock. You can then plan your future purchases.
- Stock shortage or excess prevention. The software should clearly indicate when your stock exceeds or falls below the upper or lower limits that you have set.
- Ease-of-use Your inventory tracker software should be simple to use, even on devices used at the point of sale.
- Scalability. Make sure that your inventory system is scalable.
- Demand Forecasting. Avoid having extra stock in periods of low demand. Demand forecasting is a key component of the best inventory management programs for small businesses.
- Barcode scanner. Choose an app that has barcode scanning features for rapid inventory intake.
- Efficiency Above everything, make sure that your inventory management software saves your employees time.
Eight tips for inventory management in small businesses
The following tips may help you organize your inventory for small businesses.
1. Count your entire inventory and not just the products you sell
Inventory can be described as raw materials that are used to create your products, or it can be the products you sell. Inventory can be, for example, your screenprinting business’s stock of screens, inks, t-shirts and other items. Track not only what you produce, but also what you used to create it.
2. Stay organized and descriptive
An inventory that is well organized and has labels with descriptions for each file folder will be a good one. Separate your stock for your inventory and label each item using the following information:
- Name
- Item number
- Department or Category
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- Sale price
- Discounts are available if applicable
- Tax Rate
- If applicable, the item’s UPC or SKU.
- Supplier and supplier ID
- Current item quantity
- Order quantity and trigger
When tracking your inventory, each variant of a particular product, such as a brown, black and white teddy, should be treated as a separate item.
3. Invest in an integrated point-of-sale system
It’s not only tedious, but it can lead to human errors. POS systems are the most popular inventory applications. They automate the recording of inventory changes, saving time and minimizing mistakes.
Many POS systems have inventory reporting and search features to improve organization. POS systems are able to track all sales, whether they were made at a single location or multiple ones.
4. Add your new stock accurately to your inventory
Minimizing gaps is the best way to prevent mismanagement of your inventory. This means adding new stock accurately to your inventory. As you update your stock, double-check to make sure you are entering the correct items and descriptions. Verify that all the stock ordered is included in newly received packages. Contact your supplier if you find any discrepancies.
5. Use the power of data
The inventory management system you use should include statistics such as inventory turnover, product sales volume and margins. The data you collect can be used to make key decisions about your business, including which products to drop or invest in.
6. Establish purchase order protocol
Your inventory app will alert you automatically when stock levels fall below a minimum level. This is done through a tool in your inventory management system called a “reorder trigger”. Reorder triggers will also provide you with recommended amounts to purchase for data-informed purchases. This efficient protocol for purchase orders keeps your stock stocked and your customers happy by ensuring that their favorite products are in stock.
7. Regularly perform manual inventory counts
Inventory management is crucial to the success of a small business. Therefore, you should check your app’s data manually. Set up a schedule of manual checks to make sure your app works properly. You can check individual categories of inventory instead of the entire inventory if you find it overwhelming.
8. Monitor inventory loss
It’s one matter to have less inventory after a large number of sales. Your stock going missing is another thing. This is called Inventory Loss and can be caused by employee theft, shoplifting or inventory damage. Implement strong safeguards to prevent theft and damage.
Five helpful inventory management apps
How can you choose the best inventory management app for your business? Five potential choices are listed below, each with its own unique feature:
- Deliver includes functions for pick-up, packing, and shipping
- on Shelf indicates your most and lowest profitable items
- SOS inventory includes advanced reporting
- Sort which includes the creation of custom fields
- Inventory Now includes tracking orders and invoicing.
You may be eligible to receive additional funding for your business if the implementation of an inventory management system is going to exceed your budget.
Use our simple online tool to see how your financials compare with other businesses for funding. SmartBiz Advisor (tm) allows you to track your financial health and understand how banks evaluate your business. SmartBiz Advisor can also help you strengthen your financial health and improve your credit rating. Sign up to receive feedback from SmartBiz Advisor’s users.
*The information provided by SmartBiz Advisor is only for educational purposes. This includes the Loan Ready Score. SmartBiz Advisor does not act as a legal or financial advisor, according to federal and state laws. This information should not be used as a substitute for professional or personal advice regarding your finances and credit history.
