How do you manage your inventory? The amount and number of product lines can vary greatly between different businesses. Some companies in a niche market may have only 5 or 10 products, while other companies may have thousands and thousands of product lines. Regardless of the number of lines, the process for protecting and managing inventory is the same. The factor that creates size and volume is that if you have inefficient processes and systems, the problems are compounded.
At the basic level, how do you manage inventory?
Step 1. The inventory is ordered.
To do this, you need to calculate what you need to order based on customer demand. You never get a perfect estimate of customer demand, but after a period of time you can get close. So, to confirm this step again, you need to ask for the stock that you expect customers to buy over the next week or month, based on the shelf life of your product and also the financial cost of holding that stock.
This sounds easy enough, but this is actually where many business owners spend many hours. This task of ordering is one of the most painful. If you make a mistake, it can cost you a lot of money.
So what tools should inventory management software provide to make these tasks more accurate and efficient?
A good system will include the ability to set minimum stock levels and restock quantities. The software should then be able to show the user which stock has reached its reorder level with tools to quickly add these items to a purchase order.
The other things that are also important is the ability to be able to see what stock is required for sales orders that you don’t currently have in stock.
The above two capabilities are the most important tools to look for in your inventory management software from a purchase order perspective.
Step 2. Receive the stock.
This step is the simple process of receiving the stock. What you need here, however, are control systems to ensure that every pallet, crate, and box is checked against the purchase order to make sure what you ordered has been received. If something is missing, you should note it in your system and place it on a back order or change the purchase order.
Your system is only as good as the data entered by you and your staff. if you are not disciplined, you will lose control of your inventory.
Step 3. Sale and dispatch of your orders.
This is where inventory leaves your control through sales. Items through the sales process must be scanned to ensure accurate movement of stock. If you’re not delivering product directly to the customer, then you need shipping procedures to manage outbound orders and ensure all stock on the order is shipped accurately and data is recorded in the system.
Step 3. Customer returns and supplier returns.
If your stock is faulty, you need to receive the stock from the customer and then track the return process to the supplier and get a credit memo. Many companies are lazy in this area and don’t have a good inventory management software system to help ensure that they not only return stock, but also get a replacement or credit/refund note. Don’t waste your money here, make sure your systems give you the ability to track vendor returns.
Step 4. Stock adjustments and inventory taking
Stock will get damaged, lost, and sometimes stolen, so you need the ability to adjust stock levels to ensure your inventory management system is accurate. This is completed by inventory adjustments and then, on a larger scale, a full inventory. For the inventory process, you need to be able to print your current inventory list and then go through the process of counting and recording inventory levels for the system to be accurate.
Note: A good system allows you to do complete partial stock withdrawals so you don’t have to do the stock withdrawal at once or you can do a rolling stock withdrawal.
Step 5. Product pricing and stock reports
It’s vital that you can quickly get reports on which stocks are moving, which stocks aren’t selling, and what you’re making money on so you can manage your stock levels and, most importantly, your margins.
A couple of very important features that you will find in a good POS system is the ability to change prices via the goods receipt screen, so that when you see how much you are paying for stock, you can adjust the price to maintain your levels. of margin.
The other unique feature of a limited number of POS systems is the ability to view an entire category of products including stock levels, average cost price, last cost price, and their margins with the ability to make bulk changes and individual changes on a single screen. This repricing tool is very valuable and saves hours and hours, not to mention increased profits.
So in summary, good inventory management software provides the tools you need to manage the steps above. I encourage you to take the time to do your research to find the right system with additional tools that are designed to save you countless hours each week and to ensure that you control your inventory levels and expenses as well as your margin levels.