Best practices for inventory control
Keep these tips in mind to maximize the effectiveness of your inventory control strategy.
Develop standard operating procedures (SOPs)
SOPs are detailed instructions that ensure the entire organization is aligned with its responsibilities.
Here are a few items to address in SOPs:
- How often will you conduct cycle counts?
- What kind of equipment, software, or apps will the team have access to?
- What is your annual inventory budget?
- What are your security and fraud prevention policies?
- How often will you audit your inventory control process?
Automate reporting
Inventory control yields lots of data that is nearly impossible to track and analyze with spreadsheets. Many growing businesses utilize inventory management software to run automated reports.
For instance, QuickBooks Enterprise puts industry-specific data right at your fingertips, like inventory valuation summaries, stock by item, open purchase orders, and more. No number-crunching is required.
Automating inventory control streamlines tracking, reordering, and inventory reporting, saving you time and reducing human error. With the right software, you can set reorder points, track stock levels in real time, and generate accurate reports.
Automation eliminates guesswork, helps you avoid phantom inventory, stockouts, or overstocking, and ensures your inventory aligns with demand. For growing businesses, this efficiency is a game changer.
Optimize your warehouse management
A warehouse management system (WMS) is software that puts tedious inventory tasks on autopilot. The main purpose of a WMS is to make warehousing operations more efficient.
Key features of a WMS:
- Labeling and tracking inventory by bin location or serial number
- Streamline warehouse layout
- Automating invoices and notifications
- Tracking inventory analysis metrics
Conduct regular audits
Conducting regular inventory audits can identify discrepancies, prevent shrinkage, and ensure the accuracy of your inventory data. This entails physically counting your stock and comparing it to your recorded inventory levels.
Assess risk
Determine potential risks to your inventory, such as theft, damage, or obsolescence. Develop strategies to mitigate these risks, such as implementing security measures, improving storage conditions, or adjusting your purchasing practices.
Establish supplier relationships
Building strong relationships with your suppliers is essential for maintaining a consistent flow of goods and avoiding disruptions in your supply chain. Communicate regularly with your suppliers, establish clear expectations, and negotiate favorable terms.
Forecast and plan
Leverage historical sales data and market trends to forecast future demand accurately. By analyzing patterns and seasonal trends, you can make data-driven decisions about inventory levels.
This proactive approach helps you avoid overstocking or understocking, ensuring you meet customer demand while optimizing storage costs and reducing waste.