Inventory control focuses on cutting the number of slow-selling products a company purchases while also increasing the number of high-selling products. This saves businesses time and money, because they don’t have to manually monitor, reorder, receive and reconcile goods that they don’t really need. Plus, they avoid devoting precious warehouse space to hold those products, which cuts down on carrying costs and affords more room for faster-selling finished goods.
By using inventory control, you are able to protect against making rash decisions and avoid the expense associated with overstocking on inventory. As its name suggests, inventory control helps you maintain control over your inventory level, so that you make the best use of your resources and avoid product spoilage and obsolescence.
There are four main ways to maintain inventory:
- Pen and paper, which is quick to put into practice, but is wrought with risks. It is easy to lose notes and nearly impossible to data mine or plan for future physical inventory needs.
- Excel spreadsheets, which are great for storing information, but they can’t be automatically updated. Manual data entry is still at risk of human error and requires time to manage and reconcile on a regular basis.
- Simple inventory system, which is designed to automate some stock control processes, but that doesn’t have all the features companies need as they grow, and thus, has to be replaced every few years.
- Advanced inventory management software, which is inexpensive enough to be in small and mid-sized businesses’ price range, but also scalable, so that it can meet a company’s needs as it grows and requires more complex features.
Pen and paper systems and Excel inventory control systems are adequate for startups, but they are unable to keep up if you have more complex inventory or warehouse management needs. There are numerous simple and advanced software solutions available for companies to purchase. With so many options, how do you pick the right inventory control solution for your business?
How to start
To find the right inventory control solution, start by answering these three questions:
- What product types and quantities do I need to track?
Depending on what finished goods or inventory item you sell, your priorities will be different. If you sell food items, you will definitely need to focus on products’ expiration dates to make sure you cycle through them quickly and have a high inventory turnover ratio. If you sell expensive electronic items, you will need to make sure you don’t overstock, or you’ll run the risk of finished goods becoming obsolete while waiting to be sold. If you mainly sell small, fast-selling items, you must make sure you have a stable supply chain and a good relationship with your vendors, so you keep products flowing in and out of your warehouse(s).
- What features do I need to manage my inventory?
Do you have physical inventory in multiple warehouses? Do you use QuickBooks, Xero, Magento, Salesforce, Amazon, eBay, and/or other business solutions that you need to integrate with? Do you use multiple shipping carriers for different types of deliveries? Do you need to print and scan barcodes with mobile devices? What features do you foresee you will need in the coming years as your company expands? Will you need more robust inventory forecasting and supply chain features? These are the kinds of things you need to know and factor into your decision about a solution best meets your current and future needs. If you buy one that doesn’t meet all of your criteria, you’ll soon have to make a switch to one that does, wasting time and money.
- What am I willing to pay for a good inventory management software?
You need to establish how much you can afford to pay for inventory control software. Write down the cost of each solution you investigate, including training and software expenses, and then match up those costs to the time and monetary savings you will enjoy by putting them into practice. Calculate your return on investment (ROI) to estimate how long it will take for the software to pay for itself and continue saving you in reduced man-hours, carrying costs, and more far into the future. The higher the ROI, the better the value.
Fishbowl is an affordable inventory solution that features an inventory tracking with 360-degree visibility throughout your operation and across multiple locations. It is the best choice for small- and mid-sized businesses, due to its seamless integration with QuickBooks and dozens of other solutions. It’s library of training videos, dedicated implementation experts and customer support access ensures Fishbowl users are set up for success from day one.
Request a Fishbowl demo to learn about features that can make the biggest impact for your business.