Inventory Management - Ten Signs Your Company is Ready for an Inventory Management System

Many companies start with essential financial inventory management software that consists of the ledger, vendor accounts and accounts receivable. As the business grows, inventory management becomes crucial to the company's profitability. Three software modules work together to provide excellent inventory management: inventory, order entry, and purchase orders. What signs is your company ready to start looking at an inventory management system?

1. You sometimes forget to send back-ordered requests:

Without a system to track items on order, it can be easy to forget to ship these back ordered items. An order entry system allows you to export the issues that are available and keep track of the things that were not shipped so that you do not forget to send them once possible.

2. You are unsure when to order again and how many of each item to store:

With an inventory system, you can run reports that show demand for each item within the time you choose, so you know when you're low and have a gauge for how many to stock. For example, during the busy sales months, you can maintain inventory levels for your customers, but during the slower sales cycle, you do not have a shelf full of outdated items.

3. You are not sure which items you sell are the most and least profitable:

One thing seems to fly off the shelf while another has minimal sales revenue. It is a huge mistake not to know which of these two items is more profitable. If the slow seller is more useful, a smart idea would be to focus on increasing sales to improve overall profitability.

4. When a customer places an order, you cannot tell if these items are in stock:

If you continuously have to go back to the warehouse or call someone to check the stock status of an item physically, you do your customer and yourself a bear service. Managing inventory manually wastes your employees' time. It can also result in broken promises or delayed shipping to your customer. Adding a computerized inventory control system can significantly increase your customer satisfaction and can improve the efficiency of your business.

5. You have different price levels for your products that are currently accessed from a paper file:

Keeping pricing information on paper can make it difficult to see which pricing is the most current, and sometimes the right sheet can even disappear. Having your software keep track of multiple price levels is a much more secure and organized way to keep track of prices. By assigning each customer their respective price levels, your orders automatically show the correct amount when the order is entered into the system.

6. Order entry and order billing are currently performed in two separate systems:

If you have a system for managing orders, and another different system for entering the invoice for accounts, you will need twice as long to enter the same information. You can save time and reduce manual errors by electronically entering orders and creating invoices.

7. Do you have items that can be sold in different units of measurement?

For example, you get a discount for buying things at the pallet, but your customer buys them in the carton. Having a warehouse management system allows you to receive the goods in the unit of measurement you choose (in this case at the pallet) and then sell in another group of measure (i.e. at the carton). The system will also keep track of the purchase price and cost of goods sold in the specified unit of measurement.

8. You track serial numbers or lot numbers on paper or in a spreadsheet:

You follow serial numbers or lot numbers for a reason, and that reason is to keep track of who got what items, in the event of a faulty lot or recall. Having the information on paper can be risky because documents can be lost or destroyed. An inventory system allows you to track this information electronically so you can always run a report to see who has what.

9. Do you wonder why your profitability is down? 

With best inventory management system, you can run reports by item, product line, or sales category that shows the profitability of each item, so you know along with the way the trend of each of the things you sell. That way, you can solve the problem early and maintain your profitability.

10. Your inventory drives you! The right inventory management software can provide the tools your business needs to increase efficiency, provide excellent customer service and help you take control of your financial management.

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