Being able to manage your inventory correctly is crucial for your business. If your business stocks goods or raw materials, this is especially important. While managing your inventory is a long and manual process, these days it can be made easier if you use inventory management software.
Inventory management software is there to help you streamline the process, optimise how you maintain and order any products, as well as reduce any errors.
For small businesses, leveraging inventory management software makes life easier. However, before you can sign up for the software, you need to know its benefits and how it works.
In this article, we explore everything about inventory management software and which ones are the best for small to medium-sized enterprises (SMEs).
What is Inventory Management Software?
Inventory management software helps to automate the process of inventory management. It helps to streamline the tasks needed to track, manage and update inventory. It also helps with reordering and updating accounting data.
The software mostly has subscription prices, but it all depends on which platform you use.
How Does Inventory Management Software Work?
There are many steps to inventory management. The software reduces the labour (and costs) that come with it. The below steps describe how inventory management software works.
Step 1: Data Input
The first step in inventory software contains setting up the system with all the data it needs. This includes product names, SKUs, supplier information, costs and current stock levels. It’s crucial that this step is completed as thoroughly as possible. Since the software will work off the information you provide, any errors will affect the digital data.
Step 2: Monitor Stock Levels
Once you have input all your data, the software will get started on monitoring stock levels. It does this as stock is sold and new stock arrives. If you have any barcodes that you utilise, scanning them onto the software will help in updating stock levels automatically.
This ensures that your inventory records are up-to-date and accurate.
Step 3: Purchasing and Reordering Automation
Inventory software generates alerts for purchase orders when it’s time to reorder products/stock. This helps your purchasing manager keep up stock levels and prevents any risk of stockouts or overstocking.
Step 4: Track Sales and Inventory Adjusting Inventory
Inventory software adjusts your stock levels accordingly and automatically. It covers all sales from all channels including marketplace sales or from the sales team. This helps ensure that all inventory records are an accurate reflection of the current stock available.
Step 5: Analytics and Reporting
The final step of the software process is using the software tools for reporting and analysis to generate insights into your inventory performance. The inventory software can produce reports for sales trends, turnover rates and profit margins.
The insights from the reports will help you make better business decisions such as adjusting your pricing strategy or optimising stock levels.
Benefits of Inventory Software
Now that you know how inventory software works, you need to know how integrating it will benefit your business.
Time Saving and Efficiency
As we know, inventory management can take quite a lot of time. By leveraging inventory management software, a lot of the tasks involved can be done manually. Tasks such as stock level, order management and data analysis and entry can be automated through inventory software.
This automation helps speed up your operations and allows your employees to have more time to focus on other tasks which improves the overall efficiency of your business.
Reduces Errors and Improves Accuracy
Using inventory management software reduces errors by automating data entry and stock updates. This ensures that all data and inventory records are reliable and accurate.
Improved Decision-making and Financial Management
The reports provided by inventory software can help you understand inventory costs, turnover rates and profit margins. This is important for budgeting, financial planning and improving your business.
Business Growth
As your business grows and your inventory becomes more complex, inventory software can scale to help accommodate your business growth. This also includes generating reports and gathering data from increased product lines, more complex supply chains and higher order volumes.
Enhanced Capability to Meet Customer Demands
Inventory software provides real-time tracking and forecasting tools. This helps reduce any likelihood of stockouts or extra inventory and also helps you ensure that you have enough stock to meet the demands of your customers.
Inventory Management Software Platforms
Below is a list of some of the platforms that have inventory management software. Most companies have a pricing structure that can fit businesses of any size, so you just have to pick the one that aligns best with your business.
Sage: Sage’s Inventory management software for small businesses and wholesalers.
Zoho inventory: Zoho’s inventory software offers you real-time tracking and alerts to keep you updated on your stock. Also has a free plan for small businesses.
Xero: Xero has inventory management software for small businesses beginning at $2,90.
Lightspeed: Lightspeed is best suited for businesses that are in the retail industry.
Now that you know about inventory management software, you can begin automating and seamlessly conducting your inventory management. Find the right platform for your business and begin integrating for easy and quick inventory management.
For actionable business advice on how to start, manage and grow your business, visit SME Advice to speak to one of our experts.
