India is becoming a large hub for many small and medium-sized businesses to grow and expand. If you own a business, you should know that it’s essential to evaluate it as regularly as you can to make sure you’re on the road to success. One important aspect that needs to be evaluated consistently is inventory management.
Managing a small business’s inventory is a tiresome process. Do you have the right products available? Are your products in stock? Did you lose opportunities when you were out of stock? Or did you lose money because you had too much stock? Luckily for you, while there are techniques you can use to make the process easier, you can also take the help of inventory software in India.
This article will discuss the common inventory management techniques and explain what to look for in inventory management software.
What is Inventory Management?
Inventory management is more than just having an idea of what you store in the warehouse or store. It also includes what’s in the other departments, including individual parts and combinations that are used to create other products and services. Inventory management also entails learning more about your supply partners and your best customers in order to provide the best service.
For small to medium-sized businesses (SMBs), keeping a record of these items can be quite difficult if you’re only using a spreadsheet or a physical to-do list. In order to link the product information to the other data platforms that your organization uses, you need a dedicated software called inventory management software. Choosing the appropriate software package for your business can be tricky, as you need to consider the necessary features against the best prices.
While inventory management sounds like keeping track of what you have, using an inventory management software would let you go several levels deeper. The software should integrate with other back-end office systems, like the accounting or enterprise resource planning (ERP) department. So when you do this, your sales invoices, ledger, purchases, etc., get linked with other modules, which automatically calculates your details and puts it together in your GST tax report.
The software’s function is to track the stock in the warehouse through acquisition, sales, or through use processes. It locates the items across one or many warehouses and the price of the inventory, so you can know the value of the items you have in inventory, which helps your accounting processes.
Using inventory management software might overlap typical asset management software. The main function is definitely to manage inventory levels, but this type of software tracks sales, purchase orders (POs), and deliveries as well. Inventory management software is also usually tied to point-of-sale (POS) software in many retail and storefront operations. Small operations can do without fulfilling these functions with a spreadsheet, but any business larger than that will want asset identification, order tracking, and supply chain optimization capabilities, which a good inventory management system delivers.
How Does Inventory Management Software Help?
- It reduces costs, improves cash flow, and boosts your business
- Helps you forecast demand
- Keeps track of your inventory in real-time
- Prevents additional stock and surplus of raw materials
- Prevents product as well as production shortages
- Optimizes warehouse organization and employee time
- While you can’t do GST registration through the software, it does make GST filing a lot easier and more accurate.
- Accessible right from the retail point-of-sale
- Lets you have multi-location management, allowing you to track inventory across several locations.
- It offers fast and seamless barcode scanning to quicken the intake.
What are the Best Inventory Management Techniques
These are some of the best techniques that many small to medium-sized businesses use to manage their inventory:
Fine-tune your forecasts
Accurate and precise forecasting is very crucial for inventory management. Your expected sales calculations should be based on essential factors like historical sales figures, predicted growth, market trends, the economy, promotions, your marketing efforts, etc.
Use First In First Out approach (FIFO)
Products and services should be sold in the same chronological order as they were purchased. This is even more important for perishable products like food, flowers, or makeup. A restaurant owner, for example, has to be knowledgeable and aware of the materials in his restaurant and apply FIFO methods to improve inventory management. The same concept can be applied to nonperishable goods as some items that sit around for too long might become damaged, out of date, or even unsellable. The best way to apply the FIFO approach in a warehouse is to put the new items at the back so that the older items can come to the front.
Identify low-turn stock
If you have stock that hasn’t been sold in the last six to 12 months, then it’s probably time to stop keeping stock of that item. You should also consider different strategies to get rid of that stock, like a special discount or promotion, since the excess stock is a waste of both your space and capital.
Use cloud-based inventory management software
There is different software that you can use to help with your inventory management. You can try finding one that offers real-time sales analytics. With this software, you can receive daily stock alert emails. You’ll always know which items are out of stock or in dwindling numbers, so you can order more in time.
Conclusion
Inventory is a pivotal asset for your company. If you wish to save money while also making money, you need to protect the asset and ensure it moves in the right direction. If you don’t implement inventory management techniques, it’ll be very difficult to move up the success ladder.
Try finding yourself an inventory management software that undertakes and understands the basics of inventory management. These fundamentals are key to a sustainable business. The software you choose should be a catalyst for your growth and not an additional problem.
