Automated Inventory Management (And How it Can Boost Your Bottom Line!)
If you carry stock, then you’ve probably had to deal with inventory management at one point or another. But by using automated inventory management, you take out a lot of drudgery from your routine, and more!
Inventory management is the process of tracking and organising your business’s inventory.
Business owners have done this manually for years (using excel spreadsheets, or pen and paper). However, automated systems and processes are becoming more and more common.
Proper inventory management is absolutely vital to making sure that your business stays profitable! That’s why it’s so scary to hear that 46% of small business owners don’t track their inventory (or use manual methods of tracking).
So today, we’re going to take a look at why automated (and accurate!) inventory is so important, and how to make the most out of your processes.
Reduction of Inventory Record Inaccuracies
When you use manual methods of inventory, you need to remember that there is a human making these entries…and humans, no matter how careful, make mistakes!
Inventory errors cause issues for both the day-to-day running of your business, as well as end of ear auditing. This can cause tax issues, and so many more problems…it’s just better to avoid that entirely!
Believe it or not, streamlining inventory processes is a fantastic way to cut costs in your business- some of which you probably haven’t even thought of yet!
- Labour – This one is obvious- if you have your employees doing manual audits, you’re going to be paying for their time. This takes them away from other, more important tasks.
- Inventory Costs – Having too much inventory isn’t exactly cost effective! Then again, you don’t want to run short on important products.
Reduction of Employee Theft
Okay, this isn’t a great topic, so let’s dive into it early and get it out of the way.
You might not want to admit it, but employee theft is a real problem. In fact, it has been on the rise in recent years, and is devastating to your bottom line.
It can be easy to ignore petty theft, but it’s better for everyone if you have systems in place to prevent it in the first place. Automatic inventory and audits are great for this, as it prevents inventory from going missing, and shifts the responsibility back onto those working in the business.
Reduction of Excess Inventory
There comes a point in every business, where you’ll probably find that you have excess inventory.
Maybe you tried a new product that didn’t sell, or something that was once popular suddenly dropped out of fashion.
When this happens, it’s usually advisable to get rid of the excess as quickly as possible, to free up space and allow you to store products that are actually selling.
There are a few ways to get rid of inventory. These include:
- Donating excess inventory
- Sell products online
- Use products in a give-away program
- Sell at a discount
- Bundle products with more popular products
Now, using Automated systems probably won’t fix this problem entirely, but it can certainly prevent over-ordering, and allow you to better analyse inventory patterns, which is a fantastic tool.
Improved Inventory Tracking
Another way to make sure you’re making the most of your inventory, is to make sure that you track it regularly. If you are using automated processes, this is easier than a manual audit, but you should still make sure you do it regularly.
This will help you decide what stock you should order more of, and what just isn’t selling as well.
This is also helpful when trying out a new product, and so on, and some automated programs can help you track these patterns too.
Using Automated Inventory Management Systems
Through this article, I’ve been recommending the use of Automated Inventory Systems, to allow you to make the most out of your inventory and grow your business.
Now, I want to touch on a few of the additional advantages:
- In the age of a global economy, making sure that you have every advantage over your competitors is vital to staying afloat.
- Using automated systems can help to reduce costs, therefore increasing your profit margin and ensuring that you can reduce your prices effectively
- Sales patterns can be identified more effectively, and quicker, allowing for a more effective system of storing items
If you are used to using manual processes, the change to an automated inventory management system can feel a bit daunting. However, as businesses become more competitive, there is no room for manual errors and languishing inventory.
Automated systems can improve your business in the following ways:
- Reduce inventory record inaccuracies
- Cutting costs
- Reduce employee theft
- Reduction of excess inventory
- Improved inventory tracking
- Easier identification of sales patterns
- Competitive industry advantage
- Increased profit margin
If you’re still hesitant, and not sure if this is the right fit for you, then I highly recommend contacting us at IPR accounting.
At IPR Accounting, our team work hand-in-hand with your business as you grow. We get results for our clients and approach everything with integrity and professionalism. Whether you need Bookkeeper, Management Accountant, Accounts Payable or Receivable Clerk or a Trusted Advisor, we can help.
We run your finance department, eliminate errors, help you gain control of your finances and make informed decisions with accurate information.
In fact, at IPR accounting, we help you run and manage your inventory, using state-of-the-art, cloud based software, that allows us to track inventory from multiple locations, manage large product volumes, automatically generate product data and streamline your stocktake processes!
And the best part? We set it all up for you!
If you’re interested in hearing more, and how it can benefit your business, don’t hesitate to contact us! >>> Click here to make an appointment now!