These Simple Strategies Make Inventory Management Easier and More Effective for Your Business

As an entrepreneur, you’re used to the feeling of being the one who’s always on the hook. You’re the one responsible for business decisions, from making plans for your company’s future to handling issues when something goes wrong. One of the biggest worries many small business owners have is how to manage inventory effectively. To worry less and prevent problems, a few simple practices can be just what the doctor ordered.

Streamline Your System

 Many small businesses that start on a tight budget make the mistake of hesitating to use advanced software to handle things like accounting and inventory, opting instead for basic spreadsheets. Others realize they need more advanced technology, but they err on the side of using too many different programs, which complicates their processes and can confuse employees. We suggest landing somewhere in the middle by adopting technologies that accomplish more than one function from one system.


Look at implementing automation through software that will absorb your most complex connections. One example is the use of a point-of-sale system that incorporates other business management tools. Some mobile-ready point-of-sale systems have features like tracking sales and inventory. Because these technologies integrate several key functions into one program, there’s a lower risk of having something fall through the cracks along the tracking process.


By selecting software that simplifies your most complicated processes, you eliminate excess time and boost efficiency. From your sales counter to paying suppliers, the more that can be integrated into seamless steps through your inventory system, the better.


Run Inventory Control Checks

 If you have any concerns about inventory control problems, The Balance Small Business recommends doing a floor-to-sheet audit. To do this, you pick a set number of items to physically count. Then, compare that number to whatever your inventory software says you should have on hand. This is a simple way to see if something is off, which allows you to determine what went wrong.


Another great practice for preventing inventory issues is to determine which type of stock count works best for your business. For example, if the amount of stock you keep on hand is low, you may be able to rely on a manual count. However, with more stock to keep track of, you may be better off using a periodic method for counting inventory. The most important thing is to have a set procedure in place and well-trained employees who know how to conduct it.


This brings the point of an efficiently designed warehouse as well. For items frequently purchased together, consider logical groupings. Likewise, your most popular items should be organized in your warehouse at a collection point. You might even need to expand your storage space to house those items which are seasonal. Rethink your organization to optimize efficiency.


Analyze Business Trends

 In addition to preventing loss of inventory, having a good procedure for managing inventory also helps you identify when items are no longer selling and at risk of becoming obsolete or dead inventory. This is just one example of how you can use the inventory data you have to analyze sales and trends.


According to Business Wire, one of the inventory best practices any business should follow is to develop accurate forecasting. Forecasting is based in part on trends in your market, combined with trends you’ve seen with your own sales. When you can forecast trends with accuracy, you have the best chance of avoiding the purchase of stock that won’t sell, while also maximizing potential profit from stocking inventory that will sell.


Sales trends can change from one year to the next, but it’s also helpful to pay attention to seasonal trends. Tracking inventory and sales figures can help determine seasonal reorder points and the ideal stock level for your peak season.


As fellow entrepreneurs, we know how troublesome it can be to worry about inventory. Your profits are at stake in more ways than one, as loss of inventory could mean lost revenue, and mistakes like shipping errors could lead to lost customers. Adopting the strategies outlined above does take some extra time, but it can also relieve these worries and make your inventory management headaches disappear!


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