One of the most costly and challenging aspects of running a small business is inventory management and tracking. More often than not, it involves hidden or unexpected costs that can serve as a threat to the business’s budget which is why an efficient inventory management software solution is urgently necessary. These costs include costs incurred in storing excess inventory and imported products.
No matter how proactive you are about tracking your company’s inventory, an efficient inventory is not a guarantee if processes are done manually given its many disadvantages. Investing in an inventory management software, on the other hand, can help you take inventory control in an efficient manner while alleviating some hidden costs.
How Inventory Management Software Does It
Specifically, below are how an inventory management software automates inventory processes which provides a more accurate and reliable inventory:
- Warehouse is automated.
A lot of small business owners used to believe manually recording inventories would give them better control and monetary savings only to end up with huge paper works where errors are more prone and whose errors significantly contribute to inaccuracy of data. With inventory management software, this issue is done away with as the recording of inventories can be sped up without compromising quality and accuracy with the help of the software’s barcoding and scanning feature.
Automations aid in the accuracy of data. Here, the storage is more credibly established when compared to the traditional storages in the form of logbooks. Automation of these warehousing activities rids all the unnecessary errors and headaches that come with it. In the long run, savings can be realized.
- More effective and efficient inventory control.
One of the perks of using an inventory management software is how it provides more accurate inventory records that serve as a reliable basis in avoiding shortage or costly overstocking. And nowadays, many advanced inventory management software already allow syncing of inventory data into mobile devices such that end users and managers can easily access them real time.
Besides real time syncing, an inventory management software also facilitates an easy tracking of serial numbers, bar codes and reports generation. With all these, lost sales can be significantly reduced and inventory process from point of sale to stocking to storage and delivery become smoother, consequently improving customer satisfaction.
- More prioritized needs.
A good inventory management software can help prevent cash flow issues by identifying which items need to be urgently attended and addressed. For instance, although it is commonly assumed that highly priced items in the inventory are more important, less expensive stocks actually affect businesses more because of their higher turnover ratios.
Moreover, the automation can help you identify the monetary impact of each inventory item on the business, allowing you to keep a higher amount of the more important stocks.
- More accurate data.
With inventory management software, human errors are significantly reduced which ensures accuracy in inventory records. This reduces the occurrence of customers ranting over incorrect shipment details. With way lesser errors, packing and scanning of the outflows of inventories can now be doe in a timely, accurate, and reliable manner.
While inventory management software is a good investment for your small company, buying an inventory management software is still an undertaking that requires thorough consideration of important factors to ensure a maximized ROI. Here are a few essential factors to consider:
- System Scalability
Your small company currently has a few products in stock and a small warehouse to manage; it’s true. And there is a chance that this fact may hinder you to invest in an advanced inventory managing software after considering your current requirements. While this is understandable, you still might want to reconsider whether the software that you plan to buy is able to cater to your growing demands should you expand. Best step to take in this case is to go for a scalable and flexible system that can cater to your growing sales activity. More importantly, your choice has to be able to resist sudden sale spikes or drops without demanding additional cost to cover for those.
- Customer Relationship Management
While most inventory management software do not take part in anything CRM or customer relationship management related, it still would be a big plus if the software can promote better engagement with the customers regarding the tracking of orders. A good inventory management software should feature a quick responding facility for every user inquiry. This increases customer satisfaction and with customers being the lifeblood of all businesses, this area is truly worth taking into account.
- Customer Support
Inventory systems are not that pricy when compared to other more sophisticated business software solutions. And since you have a plethora of options to choose from, make sure you choose the most reliable software provider that promises security of data, accuracy of calculations, and timely customer support should critical issues arise. With this, bugs and problems that can take place in the future will no longer qualify as a threat.
Most inventory management software feature reliable warehouse control that ensures proper flow of products to the right place at a timely manner. However, there still are a few downsides of this:
- Risk of Foreign Currency. For multinational companies that operate with more than one currency, an inventory management system that has the tools to meet these needs is necessary. Otherwise, issues that may arise during the importation of inventories and the varying cost can result to a loss of money if not dealt with accordingly.
- Threats to Theft. Although good inventory management software lessen the possibility of fraud and theft, these threats are actually not rid completely especially if many end users are involved. With all the accesses available, it may be hard to track which ones really committed the crime.
- Damage in Inventories. Most of the order management burden are handled by an inventory management software. Sometimes, the system is abused and used even on operations beyond their capacity. This can result into an inventory damage.