Many entrepreneurs use Microsoft Excel to manage their inventory when they are first starting out, and it usually proves to be effective at first. That is because a startup’s inventory management needs tend to be simple compared to bigger companies. So they can store all of their inventory quantities, vendors, and other information on a simple spreadsheet.
A FREE EXCEL INVENTORY TEMPLATE
If you are looking for a free Excel inventory template, Fishbowl offers one that will probably work perfectly for you. It includes the following column headers so you can insert the appropriate information about your parts and products:
- Item number
- Item name
- Item manufacturer
- Item description
- Cost per item
- Stock quantity
- Inventory value
- Reorder level
- Days per order
- Item reorder quantity
- Item discontinued?
Just to clarify, the first column automatically updates to let you know if you should reorder an item based on whether or not the stock quantity is below the reorder level.
SIMPLE INVENTORY MANAGEMENT
As you can see, all of this is quite basic inventory data. There is not much to this spreadsheet. And there is no way to automate the data entry process. When inventory quantities change (such as when you create a purchase order, send a purchase order to a vendor, receive new items into your warehouse, or fulfill a sales order) you and your employees will have to manually update those quantities in the spreadsheet. This is doable when you are dealing with small quantities and a relatively narrow range of products. But as you grow and your logistical challenges expand, you will discover that Excel spreadsheets can’t do everything you need them to do.
3 PROBLEMS WITH EXCEL INVENTORY MANAGEMENT
There are many problems that can arise by using Excel inventory management as you grow into a small business and even a medium-sized business. Holding onto legacy solutions may be tempting because they are familiar and they have worked in the past, but to embrace your new position and the changing landscape of the business world, you will eventually need to change the way you do business. That is often the difference between success and failure. With that in mind, here are three problems with using Excel inventory management as a growing company:
- Inefficiency. It is too time consuming to manually update a spreadsheet each time you buy and sell products. You can eventually find yourself in a situation where you are spending more time managing the spreadsheet than you are managing your inventory. This is not an efficient use of time, especially when there is a faster and better way to accomplish this task.
- Double Data Entry. Data errors can easily creep into your inventory spreadsheet and other solutions you may be using. For example, if you use QuickBooks for your accounting, you will probably have to enter the same information twice because you will first have to update your spreadsheet and then do the same thing to QuickBooks when you need to update your inventory quantities. If even a single digit is off when you perform this double data entry, your inventory and accounting records will not match up and you may face some serious problems because of that discrepancy.
- Data Insecurity. It is difficult to prevent unauthorized personnel from accessing a spreadsheet. And if someone gains access to it and maliciously or accidentally makes a change to it, you will have a hard time reversing the damage. That is why inventory management software comes with the ability to limit users’ access rights so they only see information you want them to see. And any changes they make will be stored and associated with their username, thus ensuring accountability.
ADVANTAGES OF INVENTORY MANAGEMENT SOFTWARE
Inventory management software, such as Fishbowl, solves all three of the key problems with Excel inventory management. Fishbowl gives you powerful inventory management tools to help you:
- Streamline processes in reordering, receiving, picking, packing, and shipping items to increase efficiency.
- Automatically update your accounting and inventory records on a scheduled basis, eliminating double data entry.
- Establish access rights for users to prevent data breaches and other errors from happening.
- Track inventory in multiple locations and generate transfer orders to quickly move items when necessary.
- And much more that Excel can’t do.
Learn more about what makes Fishbowl a better inventory management solution than Excel by signing up for a free trial. Experience the difference for yourself!