If you own a business that must maintain inventory, then you already know what a huge asset it is. Inventory can be the materials for your products, the products that are in the stage of being made, or the completed products. They are the way your company creates revenue and without it, you would be out of business.
If you know the importance of your inventory and you are not currently using inventory management software, then how do you keep up with it all? Additionally, how well are you keeping up with inventory?
Poor inventory management is a major reason why small businesses fail. In fact, according to the SBA, it is one of eight top reasons for small business failure. This fact alone makes inventory management software an essential part of successful businesses.
What Is Inventory Management Software?
Inventory management software is a program you can utilize within your company to track, organize, and manage various inventory components. This includes inventory levels, product sales, purchases of materials, and any other production processes you may have. Without inventory management software, you are forced to maintain all of this date with physical paper and there is a lot of room for human error.
With inventory management software, the use of barcodes or even radio-frequency identification, commonly referred to as RFID, can track shipments as they arrive, where they are in transit and even with they leave your facility. This type of system allows you to free up more time for other business uses and makes tracking a very basic part of your business. Adding this one simple system can allow your business to grown substantially over the years.
How Can Inventory Management Software Help Your Business Become Bigger and Better?
GrowMap has previously published content that emphasizes how important systems can be to improving your business and inventory management. Choosing the best solutions to manage your inventory are no exception. To become better as a business, you need a better way to manage the business.
According to an analysis by Management Science:
[clickToTweet tweet=”Management Science: 65 percent of 370,000 inventory counts from 37 retail stores were inaccurate. ” quote=”65 percent of 370,000 inventory counts from 37 retail stores were inaccurate. “]
This inaccuracy of inventory counts can lead to more error which can result in stock outs, lower response to demand, and much more. Your inventory turnover ratio can improve with inventory management software because you will better know how much inventory you have and run a lower risk of under or overstocking.
You will begin to see a better ROI for your business in multiple areas. Some of these areas include inventory management, better use of warehouse space, maximizing labor of employees, making your customers happier, and reducing wear and tear on your fixed assets.
Bottom line: you are better off with an inventory management system if you manage inventory for your business. Many businesses are scared of incorporating inventory management software because of the cost of switching. However, if you take a look at the money you are losing from not managing your inventory efficiently, how can you afford to not have inventory management software?
Brian Hughes
Latest posts by Brian Hughes (see all)
- What Is Inventory Management Software? How Can It Help Your Business Grow? - October 31, 2015
Heard a lot of business failing due to lack of inventory management. There are definitely a lot of ways to handle though upgrading to software management is expensive I do believe it will be worth it. Anyways, great read and learned a lot. Thank you for sharing this.
April Estor would love you to read ..How You and Your Team Can Handle Sales Enablement on Your Own
Great post, Brian. I completely agree with you that inventory management software is very helpful for your business to grow easily and early. Thanks for all the info and have a nice day 🙂
Errors in inventory cost money! Thank yo for sharing the importance of inventory management and ways in order to utilize it to grow the business.
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It’s crazy how damaging bad inventory management can be for any business. Even a small one can be crushed by just not knowing how much stock you have.
Hi Brian,
That is so true, partially because of how it can restrict cash flow, but even more if you are in a state that requires inventory taxes to be paid on it.
Gail Gardner would love you to read ..You Need to Avoid This Freelancing Pitfall
Thanks for explaining Inventory Management Software so cleanly. Can you suggest an open source, free and good Inventory Management Software?
Hmmm I ship wine bottles all over the world – might make sense for me to have a better overview. I am still working with Excel and slowly start losing the bigger picture in this….
Hi Daniel,
As your inventory grows you will want to at least be using a database of some kind rather than a spreadsheet. I haven’t researched, but it is possible there is an affordable inventory solution for even the smallest businesses.
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Daniel, you should definitely move away from using an excel to manage your inventory and transition into a software solution. if you have an e-commerce site, you can sync inventory software and accounting software solutions as well. This helps to streamline your process to work more efficiently and will allow you to focus on other aspects of the business, which can make room for growth.
Brian Hughes would love you to read ..When it Comes to Lead Generation, Simplicity is Key
Very truly said..Any business dealing in physical product sales need to maintain an inventory and the best way to manage inventory effectively is through software, as it makes the task easy, accurate and less time consuming. Inventory management software helps in keeping track of all purchase, vendors (suppliers), customers, daily consumption, wastage and leftovers and all other activities that affect the stock/inventory on daily, weekly, monthly or yearly basis.Also, in inventory management software there are a wide variety available in the market so, one need not worry about the price factor as you can find an affordable one as per your requirement.A very well thought topic to write on and really effective presentation.
Hi Afixi,
Based on comments in this post I realize I haven’t researched solutions for tiny businesses that don’t need something as powerful as many of the inventory management solutions are that I already know about. I wonder which company wants the very small businesses market?
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Hi Gail,
I have come across few companies those earn a really fair part of their profit from the small business segment 🙂 and as about the Inventory management software solutions I know, they are highly flexible and customizable as per customer requirement. Hence, the solution can be customized as per the target market (pay as you use) so that no one suffers a loss.
The software (management) for your inventory can be expensive, especially for small businesses, but if used properly can be a tremendous asset. By the way you have easily explained which is really helpful and more informative.
Thank you, I’m glad you found it helpful.
Brian Hughes would love you to read ..When it Comes to Lead Generation, Simplicity is Key