Keeping track of inventory in a growing retail business is tricky. Along with using a dedicated inventory management system like Solid Route Accounting™, these tips can make it easier. From handling purchases and receipts to using barcodes and stock counts, they'll put you in charge of your inventory — and your business success.
What is Inventory Control
Inventory control, also referred to as stock control, is so broad and incorporates so many functions that it is difficult to describe. In the simplest of terms, inventory control involves having greater oversight over one's stock: purchasing, receiving, shipping, returns and reordering.
There are many different ways to keep control of your inventory. One basic way is to create a spreadsheet to track quantities. You would have to keep track of your deliveries and sales as well as log returns. Of course, this is an incredibly labour-intensive process that no growing business wants to deal with. The more automated your system is, the less paperwork there will be.
Let us take a look at why inventory control is so important and what's involved in developing an effective system in conjunction with Solid Route Accounting™.
Advantages of Inventory Control
Understanding what you have, where it is in your warehouse, and when the stock is going in and out can help lower costs, speed up fulfillment, and prevent fraud.
Typical benefits of a computerized inventory control system include...
- Increased profitability
- Having enough stock on hand so that you don't run out
- Reduction or elimination of inventory write-offs
- The ability to conduct audits more quickly and efficiently
Inventory Control Best Practices
When your inventory is wrong, everything's wrong. Maybe you lose sales because you do not have a product on hand. Or your money is tied up in products that do not sell. You may even be buried in returns because you are shipping the wrong products. Taking control of your inventory control is the answer.
Here are some best practices for inventory control that are worth considering so that you can achieve the ideal inventory levels in your organization:
- Keep your stock levels sensible - To strike the right balance between stocking a suitable range of products, use historical product sales reports.
- Don't treat all SKUs the same - Focus on that 20% that statistically make up 80% of the volume and manage that inventory really well, so you maximize sales and profits. Keep close track of all your high-value items.
- Enter received orders promptly - When a new delivery arrives, record it in your inventory system right away. Pausing to enter your receipts immediately saves you time and headaches in the long run.
- Use regular (weekly/monthly) stock takes to keep accurate counts - No matter how careful you are, there will always be odd errors that creep into your inventory control system. It's important to regularly reconcile your real-world inventory with the numbers in your system.
- Reconcile your inventory using stock corrections - After a stock take, you may need to change the number of products in your system to match your count.
- Stay on top of returns - Following a well-defined return and receiving process — and capturing the reasons for returns — is essential to successful inventory management. Watch for trends. If you see products repeatedly coming back with damaged packaging, for example, it may make sense to invest in more durable cartons to save time and money on returns.
- Find products that don't sell and kill them - Use the reporting in your accounting system to take into account item sales vs. costs and credits. This reporting will often reveal at least one high-selling product that does not actually make any money and wastes most of your time. Do not be afraid to kill your high grossing-no profit products, and concentrate on pushing the 20% of the product that generates 80% of your profit.
- Leverage mobile devices - when used in conjunction with barcode scanning, mobile device significantly reduce the time to perform stock counts.
Whether you have an advanced inventory management system like Solid Route Accounting™ or a less integrated system, these tips will help you take control over your stock — your largest asset. For growing retailers like you whose inventory is moving fast — across many channels — this control can mean the difference between failure and success.