Inventory is a necessary evil for any business that sells physical goods. Ensuring that you have enough product on hand at all times is essential when it comes to protecting your profits, but mistakes made during the inventory process could be costing your company money over time.
Here are three common inventory problems that today's business owners face, and some easy solutions that can help you get back on track when it comes to inventory management.
1. Inaccurate Inventory Tracking
When it comes to managing inventory, it's easy for an employee to miscount. Whether the mistake happens during receiving, order fulfillment or purchasing, you could end up with an inaccurate inventory count. Not knowing the actual number of items on your shelves at any given time could be bad for business.
The fix: In order to ensure that inaccurate inventory tracking doesn't become a problem for your company, institute a system that relies on barcode scanning and electronic data interchange. These systems will help to reduce data entry errors, providing you with a more accurate inventory count at all times.
2. Inaccurate Product Priorities
Your company likely sells a variety of products, and it can be easy to spend too much time conducting inventory counts on products that should not be a priority. Inaccurate priorities when it comes to inventory cost your company time and money, so addressing these priorities can be beneficial.
The fix: Determine which products should be a priority for your business. Generally speaking, 80% of your demand is generated by 20% of the products you sell. These high-volume products, commonly referred to as "A" products, should be inventoried on a regular basis to ensure that you have enough product on hand. Lower priority items that don't sell as well can be inventoried, forecast, and stocked less frequently to save time and money.
3. Inefficient Software
Computer technology has made it easier than ever before for companies to track their inventory. Many companies rely on spreadsheets to tally the total number of products on hand at any given time, but these spreadsheets can be inefficient. Employees can easily make errors when working with a spreadsheet, and previous entries are not saved once new information is entered in.
The fix: Opt to rely on an accounting software program when conducting inventory checks. Accounting programs usually come with inventory features built in, and these features can provide useful information when it comes to tracking your products. You can generate reports tracking your inventory's movement since the accounting software will store all entries for future recall.
Taking the time to identify some easy ways to improve your inventory management will help make your company more successful in the future. One company that can help you with this process is Instant Inventory Service.