About 43% of small businesses either don’t track inventory or use manual processes, including spreadsheets, to manage their inventory. If you’re among the 43%, it’s okay. Even the most attentive of managers and inventory specialists find it a challenge to manage inventory consistently and efficiently. But there’s a better, more efficient way to manage your inventory: gett organized… and use inventory management software to do it!
How Can You Make Inventory More Efficient?
You can make your inventory more efficient by consistently tracking your inventory using inventory management software. For best results, choose an inventory management system, like an app, that instantly displays what you’ve got, where it is, and how much of it you’ve got on hand.
Although spreadsheets are one way to manage your inventory, they are hard to read, quite error-prone and extremely limited. Inventory management software is more accurate, grows with your business, and saves tons of time thanks to automation features like barcode scanning and low stock alerts.
Here are five ways you can improve efficiency with inventory software:
1. Track everything
One mistake many businesses make is tracking only a portion of the inventory—liked finished products—instead of accounting for everything. If you manufacture leather accessories for men, counting finished belts, wallets, and messenger bags isn’t enough. Include raw materials, supplies, parts, and work in process inventory, too.
2. Focus on forecasting
Base your purchases, production, and sales on historical data, market trends, and consumer research. If you sell seasonal items like outdoor décor and furniture, with inventory management software, you can run reports for precise planning, ordering, production and more. Custom reports will help you identify peak and slow seasons, when to schedule production, and what to order when.
3. Buy into the 80/20 inventory rule
The 80/20 rule, or the Pareto principle, helps prioritize inventory management by identifying what items are your most crucial stock. In general, 80% of business profits come from 20% of your inventory. Discover what your most profitable items are and make sure you never, ever run out of them. Set low-stock alerts, warranty end notifications and expiration date reminders in your inventory app so you’re always on top of the restocking game.
4. Implement inventory formulas and ratios
With inventory formulas and ratios, you can monitor business performance and growth. You can use inventory control software to gather accurate numbers and data for calculating inventory formulas and ratios. Before you start, get details on how to use inventory formulas and ratios correctly. Six reliable formulas and ratios include:
- Inventory turnover ratio – Determines how many times you sell and replace a product within a specific timeframe
- Cost of goods sold formula – Calculates all expenses and costs associated with the merchandise you sold
- Average inventory – Estimates the value of your company’s inventory within a specific time
- Sale-through rate – Measures the units sold vs. the units received from a manufacturer
- Day’s sale – Indicates the average number of days it takes to turn inventory into sales
- Ending inventory – Identifies the value of goods you have in stock and available to sell at the end of a specific period
5. Speed up your inventory audits using barcodes and QR codes
With QR code or barcode scanning, you can quickly update inventory counts, check items in and out, or pull up tons of information about a given product–all using your smartphone! If you have unlabeled stock, you can use an app like Sortly to create and print custom QR codes, so you can implement automation techniques across all inventory.
Sortly is a modern, intuitive inventory app that’s built for businesses of every shape and size. Sortly:
- Can be used with a desktop, laptop, smartphone, or mobile device (iOS and Android)
- Features cloud-based storage that lets you manage inventory anytime, anywhere
- Allows you to set custom permissions and give access to multiple users, including team members or customers
- Scan barcodes and QR codes using a tablet or mobile device
- Creates and prints customized QR codes or barcodes
- Offers customizable fields and folders so you can organize as you wish
- Includes alerts and reminders you can set for low stock, maintenance schedules, ordering supplies, or expiration dates
- Creates custom reports full of data and insights
- Can be learned to use in minutes
Sortly can make inventory more efficient for just about everyone. Sign up for a free trial today!