Are you happy with how many times you are turning your inventory? Have you run out of certain items that are in demand? Are you overstocked with other items that haven’t sold in a while?
Inventory is a big asset for small businesses who either manufacture or sell products, and managing your inventory efficiently and effectively can have a big impact on your bottom line.
Inventory management is primarily about specifying the size and placement of stocked goods. It requires constant and careful evaluation of external and internal factors and is controlled through continuous monitoring, reviews and interactions with production, procurement and finance departments.
Prior to the computer age, inventory management was basically done manually. Counting stock-keeping units on an annual, quarterly or monthly basis was a normal routine to ensure you have enough in stock but not too much.
Technology has significantly improved the efficiency and effectiveness of this process. Accounting systems like QuickBooks now provide an inventory management module that allows you to “connect” your sales projections to your inventory and make it easier to manage.
Inventory is a very expensive asset. Making sure your customers can get your products when they want them while at the same time minimizing your investment in inventory will help you maximize your profits.
Ongoing planning, taking advantage of discount terms with your vendors and utilizing inventory management technology will help you to manage inventory in your small business and improve your bottom-line results.