2018-06-04 15:36:56 Inventory English What is a SKU Code? SKU means Stock Keeping Unit. This is a special number, internal and unique to your company. Learn more about SKUs with... https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2018/06/04152942/what-is-an-sku.jpg What Is a SKU? Learn How SKUs Boost Profitability | QuickBooks Online

How SKUs Boost Your Small Business Profitability & Efficiency?

3 min read

Learn more about SKUs

Make sure you know what SKU means and what it can do for your activity.
SKU (pronounced ‘skew’) means Stock Keeping Unit. This is a special number, internal and unique to your company, which identifies all your product features (colour, size, etc.). It allows you to keep track of your inventory with ease. SKUs are alpha-numeric-based and usually made up of eight digits. They are composed of useful information related to your company.
All companies of any size can generate SKUs easily. Your first task should be to make a list of the variants that describe your product and/or activity: type, brand, colour, size, gender, stock location, origin, purchase date, etc.

What’s the difference between SKU and UPC? A common mistake would be to think that SKU and UPC codes are the same. But SKU numbers differ from UPC numbers in many ways. The UPC (Universal Product Code) is often called a barcode and is used internationally. It is numeric-based, universal, and made up of 12 digits accompanied by a barcode. It is issued by an international organization (GS1) in the U.S. It allows you to keep track of a product at various points in the supply chain, and it is mandatory for product sold through the retail supply chain.

Four major reasons why a small business should use SKUs

  1. SKUs increase efficiency and productivity by facilitating operations (sales to inventory), sorting and searching at every stage of the sales process. Most of all, they help you keep track of every item in real time.
  2. They improve your inventory management dramatically by simplifying stock adjustment to prevent from any stock-out. They also simplify inventory reconciliation and the managing of multi-location stock.
  3. They enhance quality control and customer satisfaction by decreasing human errors, and they allow faster delivery to your customers.
  4. SKUs boost your profitability by providing better analysis of your stock and sales, and they improve the decision-making process.

How Do I Get SKUs

You have two options in setting up your SKUs. Depending on your activity and the number of products/features you are dealing with, you might choose either to do it manually, by designing your own automated format of SKUs, one after the other; or by using an online generator that will simplify the process, once you have a clear idea of the information you want to include (type, brand, style, colour, size, gender, cost, material, season, and more).

Best Practices to Optimize SKUs Setup
Setting up SKUs is easy, but you need to follow a few rules to make the most of them.
They should be used internally only and they should be unique to your company. Make sure you never use the same SKU for different products. Avoid using a manufacturer’s SKU, as they are often too long and, if you change suppliers, they become meaningless to your business.
Their format should always be the same and easy to understand—the letters and digits should have a meaning (i.e., S, M, L, XL).
They should start with a letter and never by a zero that can be misread by humans or software.
They should stay short: between 8 and 12 characters.

Make Sure You Select the Right Apps to Fully Benefit From Your SKUs

A SKU is a code that means nothing if you don’t link it to a software system dedicated to small business that ties all the components together. To optimize your organization easily and track SKUs, you will need to choose an intelligent and reliable online inventory and order system, such as erplain.

In addition, an inventory management software connected to a smart accounting application, such as QuickBooks Online for supporting SKUs, will take your business to the next level. By integrating seamlessly with QuickBooks Online, your invoices, purchase orders, products, inventory customers and suppliers will all be easily synchronized.

Don’t underestimate the benefit of creating SKUs, especially if you are a small business, and don’t be afraid to set them up, as lots of tools are dedicated to small businesses on the market. Managing SKUs properly will boost and facilitate your activity in many ways.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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