Inventory control is the process of keeping the right number of parts and products in stock to avoid shortages, overstocks, and other costly problems.
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 spend lots of man-hours reordering and receiving 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 products.
By using inventory control, you are able to protect against making rash decisions and you also avoid the pain and expense that come from overstocking on inventory. As its name suggests, inventory control helps you maintain control over your inventory levels so that you make the best use of your resources and avoid product spoilage and obsolescence.
There are four main ways to maintain inventory in your business. You can use:
- A pen and paper, which is quick, but easy to lose notes and nearly impossible to data mine and use to plan for future inventory needs.
- Excel spreadsheets, which are great for storing information, but they can’t be automatically updated, so they have to be updated by hand by someone with specialized knowledge of a custom inventory system.
- Simple inventory software, which is designed to automate some inventory processes, but that doesn’t have all the features companies need as they grow and thus has to be replaced every few years.
- Advanced software, which is inexpensive enough to be in small and midsize 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 systems are adequate for startups, but they are unable to keep up if you have more complex inventory 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 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 else you’ll run the risk of the products 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 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? These are the kinds of things you need to know and factor into your decision of which 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.
- What am I willing to pay for inventory 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.
After you have done all of this work answering these questions, the answer should become clear. Fishbowl Manufacturing and Fishbowl Warehouse are inventory solutions that track virtually any type of inventory, and they offer extensive inventory control features at a price you can actually afford.
Fishbowl is an affordable inventory solution that lets you track tens of thousands of parts and products in multiple warehouses. It is the best choice for small and midsize businesses because of its seamless integration with QuickBooks and dozens of other solutions, plus its flexible feature set and enormous library of training and support resources.
Sign up for a free trial today to get control of your inventory with the help of Fishbowl, the #1 QuickBooks inventory control solution!
Inventory control is the process of ensuring you get the right quantities of products flowing into your warehouse. When choosing an inventory solution, ask yourself:
- What types of parts and products you work with.
- What features you need in the solution.
- What price you can afford.