A large number of small businesses start their business journey with nothing but the most basic financial management software. This software usually consists of a general ledger, which includes payable and receivable accounts. As a small business starts transforming into a large-scale one, the inventory management becomes an essential factor that can contribute to the profitability of the business enterprise. This business aspect necessitates a reliable and efficient inventory management system that consists of three software modules, which are:
- Purchase orders
- Order entry
If you are still unsure about implementing an advanced inventory management software, the following signs might be an indication that you need one for your business
Are the ordered items in stock, or not?
If you constantly find yourself calling someone to check the availability of certain products, or personally walking to the warehouse to look for them, you are doing a disservice to both your customers and yourself. You will also waste your employees’ time, by constantly asking them to check for certain items. This confusion usually results in broken deals and promises, or, in the best case scenario, delayed shippings. With the help of a computerized inventory checking system, you will greatly enhance the efficiency of your business and positively impact the satisfaction of your customers.
Separate systems for order invoicing and order entry
Many business owners tend to make a mistake of separating their order entry and invoicing functions. If you have one system reserved for the input of receivable invoice, and a separate one for keeping track of orders, you will spend double the time by entering the exact same data. Creating invoices and entering orders via a computerized system will completely negate the risk of potential manual errors occurring and will save your valuable time.
Forgetting to ship back-ordered products
If you don’t have a computerized system to track products and items that are put on back-order, you can easily find yourself forgetting to ship them. An inventory management software will allow you to efficiently keep track of the items whose shipment was canceled and ship those that are readily available.
Selling products in different units of measure
There are instances where, for example, a business gets a discount for buying items and products by the carton, but the customers choose to buy them by the pallet. If you had situations like these in the past, an inventory system would ensure that they don’t occur in the future. With its help, you will be able to purchase and receive the products and items in the unit of measure of your choosing, say, by the carton, and then sell those products in a different unit of measure, say, by the pallet. Additionally, the inventory system will also keep track of the costs of sold goods, in a specified unit of measure, as well as all the purchase prices.
Which products on sale are the least and most profitable?
It is not uncommon to find yourself in a situation where you simply don’t know which product is a best-seller and which gathers dust on the shelves. Not knowing this can significantly affect the profitability of your business. With an inventory system, you can easily assess the profitability of your products, which will allow you to focus more on them, to increase your profit.