Knowing how much of a product you have to sell is just as important as selling it. Without that information, you could quickly over or undersell your stock, creating a whole slew of issues with poor inventory control. Your business should consider tracking its inventory to improve managing inventory as well as the processing, accounting, and selling of your merchandise.
How can your small business track inventory?
Why Tracking Inventory Is Important
Businesses put in place an inventory control system that dictates the methods and procedures for sorting and selling stock. A company needs accurate and up-to-date information on the status of its stock to make good business decisions and generate revenue. Companies will implement numerous inventory management techniques to help with this.
Understanding all aspects of your inventory and applying that information to the operation of the company is a significant part of running a business. Do that well, and your cash flow will increase, and revenue will grow. Do it poorly, and your business will suffer from lost, wasted, or damaged goods, overstocked items, and added expenses.
Inventory tracking also provides essential financial information for the accounting and bookkeeping side of the business, as the stock directly impacts the balance sheet and other financial statements.
Tracking Inventory Basics
When you’re first starting your business, it can be a little overwhelming to start tracking your inventory. But you can use certain methods and the following steps to start your inventory management on the right track.
- Decide which inventory method you should use. This will help determine how often and which process to follow.
- Identify low-turn stock. If you have stock that hasn’t sold well in the past, it is an indicator that you shouldn’t be stocking these items. Excess inventory wastes both your space and capital.
- Audit your inventory. While inventory software does a decent job at tracking what you have in stock, it’s always a good idea to actually count your inventory once in a while. You can decide to do this monthly, quarterly, or annually depending on your industry.
- Maintain quality. Don’t forget about quality control when it comes to your inventory. You will have to ensure that all your products look great, are working well, or are still good to eat. Get staff to conduct regular checks on all your inventory.
- Use cloud-based inventory management software. By using cloud-based software, it will allow you track your inventory in real-time. Plus you can also get insights into your sales analytics.
Manual vs Automated Tracking
There are various ways a business can deal with their inventory control systems and processes. Previously, store owners had to count and process their inventory by hand. But these days, companies have the option to use software to automate the inventory tracking process. So which method of tracking and recording is the best?
Benefits of Manual Tracking
Companies can manually take stock of their merchandise, and many still do, using Excel spreadsheets for tracking. Using Excel spreadsheets is a highly cost-effective form of tracking stock and managing your inventory.
However, with this type of manual upkeep, human error and out-dated information can quickly wreak havoc on the system, causing mistakes for the company and dissatisfaction of customers. Manual tracking should only be used for businesses with small inventories and those who have a deep understanding of inventory management.
Benefits of Automated Tracking
In recent years, many businesses have turned to software to help them manage these complicated tasks. So much so that in 2019 the inventory management software market grew to 3 billion USD, as recorded by Global Market Insights.
This software is an inventory management tool that helps companies process, record, and track the volume of their goods with real-time reporting and automatic updating of quantities as they are being bought and sold.
Good inventory software can streamline the stocktaking process, improve supply chain management, run reports on what is selling and what is not, and help businesses make the right decisions. Learn more about the benefits of inventory management software.
Examples of automated inventory tracking
Various management inventory software, applications, and platforms are currently on the market that can help businesses with their inventory management. Such inventory tracking tools include:
- QuickBooks Online
- SOS Inventory
- WooCommerce by OneSaas
- Connex inventory management app
- Katana Inventory and Manufacturing
- Inventory by erplain
- Shopify POS system
How Inventory Software Can Help
Keeping a pulse on your business means keeping track of its inventory. Inventory software not only records all the necessary stock information in one place, but it also provides you with the data and insight to make fiscally responsible decisions to improve your business. These inventory management tools depict your inventory list, stock levels, inventory counts, safety stock all in one place for easy referencing.
Real-time updates and comprehensive reporting displays your best-selling items, total sales, and total taxes, so you know where your inventory levels stand at any time. Software like QuickBooks inventory management feature seamlessly connects your stock quantities to your finances to adjust your balance sheet for your day-to-day operations so you can check your inventory values instantly.
With an inventory tracker, it can become apparent what items are popular with your customers and what ones are not. Lose that excessive inventory and only stock what you know will sell to improve cash flow.
QuickBooks Inventory Management
With QuickBooks Online Inventory management features, your small business can take advantage of automated tracking software to ensure your inventory is always in tip-top shape. Use different inventory software? No problem, QuickBooks Online seamlessly syncs with inventory management apps to cover all of your business needs in one place.
Give the customers more of what they want, with real-time sales reports and inventory valuations, as well as low-stock alerts, with invoicing and vendor information all in one place.
Improve cash flow management as well as your inventory management systems. Get the most out of your inventory, and start tracking your stock today.