How do you manage your inventory
The amount and the number of product lines can vary greatly between difference business. Some businessses in a niche market may only have 5 or 10 products where other businesses can have thousands and thousands of product lines. Regardless of the number of lines the process to secure and manage inventtory is the same. The factor that size and volume creates is that if you have inefficient processes and systems the problems are compoounded.
At the basic level how do you manage inventory?
Step 1. Inventory is ordered.
To do this you need to work out what you need to order based on the customer demand. You never get your estimate of customer demand perfect but after a period of time you can get close. So to confirm this step again you need to order the stock that you expect customers to purchase over the next week or month depending on the shelf life of your product and also the financial cost of holding that stock.
This sound pretty easy but in reality this is where so many businesses owners spend many many hours. It is this task of ordering that is one of the most painful. If you get it wrong it can cost you a lot of money.
So what tools does inventory management software need to provide to make this tasks more accurate and efficient?
A good system will include the ability to set minimum stock levels and stock re-order quantities. The software shoudl then be able to show the user what stock has hits its re-order level with tools to quickly add these items to a purchase order.
The other things that is also important is the ability to be able to see what stock is required for sales orders that you do not currently have in stock.
The above two capabilities are the most important tools you should look for in your inventory management software from a purchase order perspective
Step 2. Receive the stock
This step is the simple process of receiving the stock. However what you need here is systems of control to ensure each pallet, crate, and box is checked against the purchase ordered so that you ensure what you have ordered has been received. If there is something missing it needs to be noted in your system and either placed on back order or the purchase order changed.
Your system is only as good as the data entered by you and your staff. if you are not disciplined then you will lose control of your inventory.
Step 3. Sale and dispatch of your orders
This is where sotck leaves your control through sales. Items thorugh the sales prcoess should be scanned to ensure accurate movement of the stock. If you are not giving the product diretly to the customer then you need dispatch procedures to manage the outgoing orders and to ensure all the stock in the order is dispatched accurately and the data recorded in the system.
Step 3. Customer returns and supplier returns
If you stock is faultly then you need to receive the stock back from the customer and then track the process of returning this to the supplier and getting a credit note. So many businesses are laxy in this area and do not have a good inventory managment software system that helps ensure they not only return the stock but get a replacement or a credit note/refund. Do not burn your money here, ensure your systems gives you the abiliyty to track on follow through on supplier returns.
Step 4. Stock adjustments and stock take
Stock will get damaged, lost and sometimes stolen so you need the ability to adjust stock levels to ensure your inventory management system is accurate. This is completed through stock adjustments and then on a larger scale a full stock take. For the stock take process you need to be able to print out your current stock list and then go through the process of counting and recording the stock levels so that the system is accurate.
Note: A good system allows you do complete partial stock takes so that you do not have to do the stock take at the one time or you can do a rolling stock take.
Step 5. Product pricing and stock reports
It is vital that you can quickly get reports on what stock is moving, what stock is not selling and what you are making money on so that you can manage your stock levels and most importantly your margins.
A couple of very important features that you find in PBSA POS is the ability to change prices via the incoming goods screen so that as you see how much you are paying for stock you can adjust the price to maintain your margin levels.
The other feature unique to PBSA POS is the ability to see an entire category of products including the stock levels, the average cost price, the last cost price and your margins with the ability to make bulk changes and individiau changes on the one screen. This re-pricing tools is so valuable and save hours upon hours not to mention boosting profits.
So in summary good inventory management software provides the tools you need to manage the above steps. PBSA POS is one inventory management software system that has additional tools that are designed to save you countless hours each week and to ensure you control your stock levels and expenses in addition to your margin levels.
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