How to Boost Your Business Profits by Simplifying Your Inventory Management
A tedious and time consuming job for any small business, keeping track of inventory is never easy. Find out how software could help…
Inventory management is probably the most tedious job in a business that deals with a large amount of stock. Noting the stock levels and constantly checking them is key to making profits in a business.
A competent inventory management software simplifies this to a great extent. It aligns and integrates with all your business processes that interfere with the stock levels and provides you a simple and more efficient solution that you can rely upon.
Here are the top eight benefits you get when you automate the inventory management system in your business.
Real-time stock levels anytime at your fingertips
This is definitely the most important advantage of having a competent inventory management system. Since all your business processes that handle stock levels are automated, your software reports will give you the stock levels at any given point of time, present and past. You can now randomly check the physical stock of any product since your system will show the current stock levels in real-time. Any discrepancies can be immediately checked for and corrective actions can be taken before you incur a further loss.
Stock levels are optimally maintained
Since you have the software that maintains the reorder levels, you will be alerted whenever a product inventory drops beyond the reorder level. You can immediately place a purchase order and make sure that the item reaches you before the last piece is sold out. You can also analyse the stock reports and find out the slow-moving products and try to return or sell them at discounted rates to get rid of the dead stock.
Place an order, on the go!
Even if the competent authorities who place the purchase order are not available on-site, they can always place or authorise the purchase order on the go, using the mobile version of the inventory system. This makes sure you are well-stocked even when you are traveling.
Know your worth
As you grow your business, so will your stock in hand and, using the software, you can always know the value of stock on hand at any given point of time. This adds to the assets of the business and it can be helpful in preparing the financial statements. Knowing what your business is worth can definitely help you place yourself among the peers and to plan the future of the business more efficiently.
Stock analysis and purchase planning
Stock analysis and purchase planning are both major advantages of having an automated inventory management system. The digital data helps you draw a useful analysis of the existing stock and the previous purchase and sale patterns can help you budget and plan your purchase more efficiently. You can easily track down how long it takes for a particular vendor to deliver the goods you ordered using the tracking system.
You can then plan your purchases keeping in mind the time taken for delivery which should ensure that you never go out of stock when a product is in high-demand. Similarly, for easily perishable products and items that are not much in demand, you can keep lower, yet a base minimal, stock level and order more frequently as the stock sells out. This will also keep your spending pattern in check as you will have very little investment in dead stock if you follow the analysis intelligently.
Since the entire system is automated, there are very few chances of mistakes and even those can be tracked down and corrected. The only entry points for the stock will be purchases and sales returns if your company allows that. The only exit points for the stock will be sales and purchase returns if your vendor allows that. Once you know whether it was the entry or the exit that went wrong, you can track down the exact transaction and take a corrective action.
Your software will require login and authorisation of purchase orders and other major transactions which will make sure no fraudulent entries are made. This will make your stock levels more accurate and authentic. There’ll be very little chances for missing or misplaced stock as all the entries can be easily tracked down to the user who entered it. This makes the stock traceable and the employees more responsible for their job and the company’s stock.
With a competent inventory management system that’s integrated with the accounting system, every unit of stock is accounted for from when the purchase order is placed till it is shipped to the customer. This helps in better costing and pricing since every aspect of the business flow is well-accounted for.
All costs involved from the time taken for placing the purchase order to the unit price of the product and the costs involved in transportation are recorded in the inventory management system. It will automate the accounting entries as far as your inventory is concerned.
These are just some of the basic advantages of having a competent inventory system in place for your business. If you invest in an advanced system, depending on how crucial inventory management is for your business, you can get more advantages such as automated purchase order placement, automated shipping request, CRM etc.