Do you and your business contain an inventory of products and/or materials? Some companies with an inventory choose to track those items, and others don’t. Many companies feel that the process of tracking inventory in and out is too overwhelming – the setup time and ongoing management seems simply too much to manage. These advantages of inventory tracking may just be enough to change the minds of those who have avoided it in the past.
Reduce item shrinkage.
Without inventory tracking, it can be hard to know where items are, and where they’ve gone. Somebody grabs an item here and an item there, forgets to write it down or tell anyone, and soon you’re inventory count is way off and the items are gone, without any income to show for it. Though it’s unpleasant to think about, stealing can be another cause for item shrinkage, and it’s much harder to track without the ability to track your inventory items. Adding an inventory management and tracking system, along with software and new processes, can significantly prevent shrinkage and improve your bottom line.
Understand item profitability.
Without the ability to see an item’s cost and sale price, it can be difficult to understand that item’s profitability. Even if you are selling the item for what seems like a reasonable price, how do you know the item is profitable? By tracking your inventory items in an inventory management system, you can run reports to see profitability by item, and you can gain useful insight that helps you make the right decisions about which items to promote or discontinue. You can also see where pricing adjustments may be needed, or negotiate better pricing with your vendor.
Keep customers happy.
When your customer calls to place an order, how do you know what is available, and how many you have? Relying on memory or physically walking back to the warehouse to check are both inefficient methods of letting customers know what you have. It can also be frustrating to the customer. Tracking your items can help you see instantly what is available and what is on order, so you can quickly give your customer an idea of what you have, and when it will be shipped.
Keep the items you need in stock.
Are you constantly running out of the products your customers order most often? Are you finding a shelf full of products nobody wants? These can be the result of not being able to analyze your inventory. By tracking items, you can run reports to see patterns of the hot (and not-so-hot) sellers. You can run long-term reports to understand patterns and order products to be available at the right time of year, when your customers want them. You can also liquidate the items you don’t want, so the shelf space is available for the items that sell.
Setting up an inventory management system can be a big task, but as long as you set up the system correctly and have the right staff and accounting software in place, you can reap big benefits from doing so (Source: http://www.redwingsoftware.com/rwssn/home.aspx?page=329).