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Inventory Management 101
One of the most time-consuming and most important aspects of running a business is inventory management. Keeping an accurate account of your inventory is crucial to ensuring operations runs smoothly, you don’t run out of product, and you can predict future needs. Here are a few basics you should know about inventory management, including a few best practices and the potential benefits of an inventory management software.
Why Does Inventory Management Matter?
Managing your inventory might seem simple, but it plays a much bigger role in your business than you might realize. Keeping a proper count of your inventory makes it easy for you to forecast demand, and the longer you keep track, the more accurately you will be able to predict your needs.
Having an effective inventory management system is also crucial for reducing costs. Not only will you not be wasting money on product you don’t need, but you’ll also be saving money on unnecessary storage space and overtime pay for employees. Finally, while implementing a sales and inventory system costs money on the front end, you will find that it quickly pays for itself in and accuracy.
One unexpected benefit of an inventory management software is the boost in morale. Your employees will have a quick and accurate way to find what they need, so they are no longer wasting time searching for product. Keeping stock is much easier and faster, leaving your employees less stressed and better able to manage their time.
Best Practices
For businesses big and small, there are a few key things to keep in mind in your inventory management techniques. First, you’ll want to keep the first in, first out (FIFO) method in mind. Add new products to the back so that older items will be the first to be pulled from the shelves. This is obviously beneficial for perishable items, but using this method with nonperishables is good as well, so that the stock doesn’t become damaged.
Even with the best sales and inventory system, you will need to occasionally audit your inventory by hand. You can decide how often you should check in with your products based on what works for you, but having a hands-on approach to your inventory can help you more clearly see what you’ve got, instead of just looking at the numbers. This is also a great way to keep track of low-turn stock that hasn’t sold in a while so that you can evaluate if you need to keep stocking that product.
Finally, having an inventory management software that’s connected to the cloud will help you ensure your numbers are always accurate. Stock will be automatically adjusted as it is taken from the shelves, and you’ll be able to get your numbers at a moment’s notice. This will prove especially helpful as your business starts to grow, so you can track your stock at multiple locations from anywhere in the world.
Your sales and inventory system is vital to your business’s daily operations. Contact DEAR to learn about how our inventory management software can help you.
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