Business owners and senior company executives now understand why inventory management is important to their business. But it is something that is quite hard to get right. There will be times that assumptions and relying on external benchmarks work. However, the market can be quite volatile and while there are traditional peak demand seasons, there are also other factors that can suddenly trigger either an increase or decrease in the demand for specific products. Even with accurate sales forecasts and improved customer service, product inventory could end up being short or overstocked.
When to beef up stock is difficult to project, especially when you do your business process manually. Thankfully, there are several inventory management systems from various suppliers, that make inventory control and other business processes easier and more accurate. There are several more ideas on how an inventory management software can improve your business productivity and profitability, as outlined below.
Prevents Running Out Of Stock
Although it cannot be helped at times and customers can accept when you run out of stock, you can also feel their frustration and disappointment. On your side this means that sales opportunities are missed. The most significant consequence of running out of stock is that your customers will purchase from you competitors. It may be just for one time, but it could be permanent if stockout occurrences happen multiple times. Using an inventory management software will help you keep an accurate inventory level because you can access data real time. Find an inventory management software with on-demand data capability. It will help you make forecasts on when to order products.
Prevents Having Overstock
In the same manner, an inventory management software prevents you from having an overstock, which can take over a large space in your storeroom or warehouse. It can be quite costly especially if your products have expirations dates. You’ll have an accurate insight on your inventory level to maintain the right number of products based on historical product demand data.
Improves Your Cash Flow
If you are running a small business and have limited capital for product purchase, an inventory management software allows you to manage your cash flow better. You can fill your shelves with just the right amount of products without going overboard, based on the projection that you can sell these products at a given time. This means that you prevent products from sitting too long in your storeroom that effectively ties up your capital. With a robust inventory software, you not only manage your inventory better, it also has options to help you with capital management.
Streamlines Your Business Operations
Technology drives business productivity, helping you to keep accurate product inventory. It also helps you spend less time in controlling business functions and inventory planning because a robust inventory platform can integrate and automate business processes. You then will have more time to look after sales to improve your profit and push forward to growing your business.
Helps Increase Your Profits
With inventory control, you’ll be able to track and identify issues that can occur, as it is capable to providing analytics and reports so you can have better quality management. It can help you in forecasting and planning capacity requirements for peak seasons. With accurate reports your business will be more efficient and your customer service will improve. Satisfying customer demands lead to better profit margins.
Compare the features of different inventory management software before you make a final decision. Look for an inventory control program that offers you more flexibility where you’ll be able to adjust stock levels and manage stock of specific products. Look for a product that can be integrated into your business and accounting processes.