Reduce Time and Money with Inventory Software

One of the most time consuming and expensive tasks that businesses undertake is taking physical inventory. Whether it is determining the amount of inputs available for manufacture or finished goods for sale, the act of counting merchandise and determining physical inventory can slow down or even halt operations. One simple way to increase the accuracy of the inventory count, while saving time and money, is to use inventory software to automate the inventory process.

Most small business owners attempt to automate inventory on their own by developing excel spreadsheets or other self made ways to track orders separately from their point of sale (POS) cash register sales records. These systems are usually inefficient and result in a duplication of efforts. In most cases, inventory still needs to be confirmed by a physical count of the remaining stock on hand. Since both methods do not communicate with suppliers, orders for new merchandise need to be entered into a third system. The problem with these self made systems is that there isn’t a way to capture customer level data. Without this, data businesses cannot develop a database of their customers’ shopping habits and therefore cannot create promotions to serve their specific clients. In contrast, a fully integrated inventory software system can not only reduce the cost and expense of inventory management, but can also provide advanced information on the customer sales experience that can be used to support and increase sales.

Although large established retailers could not compete without their automated inventory systems, many small businesses believe that the expense does not equal the perceived benefit. However, due to technological advances, the cost of both the inventory software and hardware continues to fall within the financial reach of many small businesses. There are many integrated PC-based POS and inventory systems that are affordable for most small businesses. For instance, Microsoft Dynamics Retail Management System runs around $1,300 for a single store with one check stand. One of the many benefits of PC-based inventory software is that they are relatively easy to learn and come with built-in training modules to help you get your employees up to speed. With integrated inventory software all of your transaction information is centralized on a PC platform that is easily expandable.

To get the maximum efficiency from your inventory software, all inventory and merchandise for sale will have to be bar-coded. Instead of individual price tags, information on the product including its price will be indicated by the barcode. Once barcodes are in place, it is much easier to manage inventory and sales. For example, merchandise does not have to be re-priced for periodic promotions; instead the price is changed in the system and is reflected at the point of sale.

One you have implemented your inventory software, the way to maximize the benefit of inventory management is to allow your vendors to share your transaction data. Instead of making periodic supply orders, you can set minimum inventory levels and allow vendors to ship when those levels are reached. Your inventory software will trigger refill orders, and your vendors will then have the responsibility for making sure that inventory is maintained at appropriate levels. Although vendor-managed inventory requires a certain level of trust, it can also significantly reduce costs and allow management to focus on business operations. Sharing transaction data with vendors will also make it easier to determine which vendors are providing the most benefit and whether you should consider vendor consolidation or replacing those vendors that are not adding to the bottom line. Inventory management in concert with vendor management can result in better inventory control while providing maximum services with minimal vendor resources.

Although implementing an integrated inventory software platform will reduce the time and effort it takes to manage inventory, the real benefits will come from the ability to understand your customers’ purchase preferences and the ability to categorize them and to tailor marketing strategies for each customer segment. The ability to analyze and develop the correct product mix will lead to increased sales and profit margins. It is up to business owners to decide if an automated inventory software system will provide adequate returns for the investment made.