Contemporary Inventory Control Challenges
From IPR Accounting years of professional practices, we understand that inventory control is absolutely critical to run an efficient businesses. Thus, we will share some inventory management problems, and advise how to avoid such issues in the article. We also believe by solving inventory issues, it improves efficiency and fosters exponential growth for business, and Cloud based management software is the key.
Currently, IPR Accounting is partnered with Unleashed and Dear Inventory, two of the market leading inventory management softwares, if you would like to book a 30mins discovery call, please follow the link provided below.
Early indicators of poor inventory management
If your business is experiencing some of the symptoms below, chances are there is a root connection to the way inventory is managed.
- High cost of inventory
- Low rate of inventory turnover
- High amount of obsolete inventory
- High amount of working capital
- High cost of storage
- Lost customers
- Consistent stockouts
Possible causes of inventory control issues
Manual inventory tracking
Most of the businesses have adopted manual inventory management by starting using Excel. Whilst, spreadsheets normally works fine at the very beginning with small operation, they can quickly turn into a disaster.
Moreover, manual inventory tracking and stocktaking can be used for small businesses at beginning. However, when the business grows, manual management would no longer be suitable. The process will become time-consuming and erroneous, and the malfunctions process doesn’t not foster a business growth.
Large inventory volumes
Most businesses have 20 to 40% of the working capital tied up in inventory stock. However, Inventory reduction is difficult to process.
Businesses need accurate data to identify sales trend, popular items, customer behaviour and more. Otherwise, the business may ends up with large volume of orders or order to little and lost customers. With accurate reports, businesses can better forecast customers and order accordingly.
The solution: Get automated
With the Cloud – based inventory management system, it goes beyond merely recording in-stock inventory. It is also a valuable time-saving automation tool that can streamline business processes. For example, when your stock is reaching low levels, great inventory management software can notify your users and automatically record stock from your supplier.
Thus, by adopting a cloud based inventory management solution, a business is able to access accurate date in real-time, this also enable the business for better forecasting. Furthermore, the proactive service an alerts functioned with the system can help detect issues, and guarantee the control over stock and supply chain of the business owner.