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Running a business

How cloud-based inventory management can benefit your business

By QuickBooks Australia

Published on June 6, 20246 min read

Cloud-based inventory management is the monitoring and maintenance of a business’s inventory levels using online software. Cloud-based inventory management seamlessly keeps track of inventory coming in and going out of your business. These real-time updates help you avoid many of the issues that arise with traditional methods of measuring stock levels.

Traditionally, inventory management has been one of the most time-consuming and frustrating tasks carried out by e-commerce businesses. It can be painstakingly repetitive and diverts resources from high-level facets of the business, like growing the brand, improving efficiencies and adding new product lines. However, it is an essential component of running a successful e-commerce business, specifically when it comes to supply chain management.

That’s why you should consider using cloud-based inventory management. With this web-based software, all of the necessary inventory control tasks are completed with greater efficiency and effectiveness. Learn more about the many benefits of using cloud-based inventory software and how you can get started. Use the links to navigate the article.

What are the benefits of switching to cloud-based inventory management?
Instant stock level updates
Error reduction
Improved efficiency
Security and safe data storage
Built-in reporting and analytics
Is inventory management software worthwhile?

What are the benefits of switching to cloud-based inventory management?

When it comes to inventory management, accuracy is important. Stock is the lifeblood of your e-commerce business, so maintaining the right inventory levels is crucial to your operations.

However, traditional inventory management practices leave a lot of room for error, which can be detrimental to your small business both in the short and long term. From simple manual mistakes to poor forecasting, outdated inventory control leaves your business vulnerable. Fortunately, there are software solutions like cloud-based inventory management to help you circumvent these common pitfalls altogether.

Making the shift to a cloud-based inventory management system can benefit your small business in several key ways.

Instant stock level updates

The main benefit of cloud-based inventory management is that it continuously updates stock levels so you always know how much stock you have on hand. Updating inventory is as easy as barcode scanning new products into the system; the rest is done for you.

Web-based inventory control is a powerful tool that can help you determine:

When it’s time to reorder inventory. With insight into exactly how much stock you have (since it’s updated in real-time), you can stay on top of stock replenishment, which often falls by the wayside.
The optimal safety stock level to accommodate lead times when reordering. This is an essential metric for customer satisfaction so you can avoid stockouts.
Which inventory is moving and which isn’t. This can help you eliminate products that are weighing your business down.

Having a high-level view of your inventory levels can help you avoid stockouts, overstocking and dead stock, and it can help with customer relationship management (CRM), since you’ll have everything your customers could want on hand.

Error reduction

From incorrect data entry or neglected inventory level updates to incorrect reorder points, countless errors can occur throughout the inventory management process. Cloud-based inventory management can reduce errors across the board.

Thanks to automation, many of the traditionally inevitable issues related to human error are eliminated. With cloud-based software, information is updated instantly, with no risk of duplications, missed sales orders or incorrect information. With fewer errors in your inventory management process, profitability should increase and you’ll spend less time problem-solving.

Improved efficiency

Cloud-based inventory management software automates virtually all aspects of the inventory and order management process. When it comes to efficiency, cloud-based inventory management software understands the demands of today’s fast-paced business world and the need for optimisation, putting all your inventory information right at your fingertips. You can log into the system on your mobile device or tablet to generate stock reports, complete audits, perform stock-takes and access stock movement history.

Here are just a few of the tasks automation can take over:

Inventory tracking
Tracking order fulfilment
Updating stock levels
Alerting you once you approach the reorder point
Submitting purchase orders for you.

Since all of these tasks can now be done without the need for human labour, your team has more time for higher-level decisions and priorities.

Another way cloud-based inventory management increases efficiency is by allowing you and your team to conveniently access this information from anywhere with a reliable internet connection.

Security and safe data storage

With cloud-based inventory management, you can rest assured that your business data is secure. Responsibility for security is taken on by the service provider, who constantly updates the cloud inventory management software to avoid cyber attacks. Additionally, manual data backups on storage devices are no longer needed, as all data is consistently updated in real-time and securely stored remotely in the cloud.

Built-in reporting and analytics

Forecasting is one of the trickier aspects of running an e-commerce business. Knowing how much stock to order in future based on how much it’s selling now is a fine art.

With the ability to link stock levels with your e-commerce platforms, accounting software and 3PL provider, cloud-based inventory management is able to collect valuable data about your business. The software can then analyse your sales and inventory data and create automated reports so you can make data-informed business decisions. With current and historical data on hand, you can gain a better understanding of:

How much inventory of each product you’ve purchased in the past
How much you’ve sold over past sales periods
How much deadstock you currently have on hand.

This information provides you with the insight needed to know which products are worth continuing to invest in and which you might be better off cutting out altogether or, at the very least, stocking less of. While these details might seem small in the big picture of running your business, this knowledge can actually help you increase profitability and make choices that help grow your business.

Is inventory management software worthwhile?

As with any business expenditure, you may be hesitant to make the move to cloud-based inventory management software, and that’s understandable. However, there are plenty of benefits to doing so.

As we’ve outlined, there are many benefits of moving your business to the cloud. With cloud-based order management and its advanced functionality, you can cut down on time-consuming inventory management tasks. This can allow you to get back to the core business duties that greatly benefit from your time and focus.

From streamlining workflows to helping increase profitabilities, cloud-based inventory management software can be an invaluable tool in helping your business grow.

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