Barcodes & QR Codes

How to Implement a Barcode System for Inventory

May 1, 2024 • 9 min read

These days, there are tons of ways businesses can improve their inventory strategy. And perhaps none of them is as impactful as using barcode inventory software. This guide will walk you through the benefits of using a barcode inventory system, and then show you how to prepare your shop and your team for barcoding. 

Whether you’re a large manufacturer with multiple warehouses or a small plumbing company with a single van , barcodes and QR codes are one of the lowest-risk, highest-reward upgrades to an inventory system you can make. 

Barcoding your inventory can save you time, money, and the hassle of manually tracking and managing your products. When used with inventory management software, barcodes help you get instant access to the status of your inventory, including descriptions, availability, cost, and location. 

This article will detail the different types of barcodes out there, the benefits of barcoding, and how to implement a barcode inventory system for your small business.

Free Ebook: The Complete Guide to Barcoding Your Inventory

This easy, comprehensive guide will help you:

  • Implement a barcode inventory system for your business
  • Generate your own unique barcodes
  • Practice perpetual inventory control with barcoding


What are barcodes?

Barcodes are a visual representation of data, displayed as a unique combination of parallel bars and spaces. 

These bars represent the numbers 0 and 1 (binary digits)—and they are sequenced to represent any number from 0 to 9. When your barcode reader scans a barcode, it interprets the unique sequences of bars, then performs the desired action. 

Here’s a little bit more about the types of barcodes used today. 

1D barcodes

1D (or one-dimensional) barcodes are linear. When you think of an old-school barcode, you’re thinking of a 1D barcode. You’ll often find 1D barcodes on items like a bag of chips at the supermarket and other traditional consumer goods. 

1D barcodes hold a limited amount of data, and they are read horizontally by a barcode scanner. (A barcode scanner could be a clunky piece of equipment, or even your smartphone.)

For a traditional barcode to mean anything, it must be linked to some kind of database. Inventory management software can help you set up a barcode database system.

Two types of 1D barcodes are SKU barcodes and UPC barcodes. Here’s a little more about them.

SKU barcodes

A stock-keeping unit (SKU) is for internal inventory tracking. It’s an 8-to-12-character alphanumeric code that represents a physical product or an intangible product. Characters in the SKU represent details about your products or services. You can scan SKU barcodes into inventory management software to analyze product quantity, purchases, or sales. SKUs for intangible products help you access details, such as services rendered or units of time spent on consultations, estimates, service calls, or repairs.

UPC barcodes

A universal product code (UPC) is for external use. Usually, there are 12 numbers in a UPC. Each UPC uniquely identifies a company and its product. If you’re selling products or services to other vendors, they will likely require a UPC barcode for each product. In the United States, only GS1, a non-profit organization, originates UPC barcodes and maintains standards for them. You can apply for a UPC company prefix and barcodes from GS1.

2D barcodes

On the other hand, 2D barcodes use a whole lot more than lines and spaces to convey information. And while these shape-filled, complex codes appear smaller than traditional barcodes, they’re actually stuffed with way more data. 

Also known as a data matrix code, 2D barcodes need to be read with an imager. That’s one of the reasons you don’t see them as much, especially in inventory.

QR codes

Finally, QR codes are an even more data-rich alternative to barcodes, and these can be read easily, too. These “quick response” codes are another kind of two-dimensional code that’s a cinch to scan with a smartphone. 

With the right software, 1D barcodes are powerful enough for inventory

A barcode is visualized on an inventory app for jewelery tracking.

Now, you might think that bigger is better when it comes to a barcode inventory system. But since you will be using an inventory app like Sortly to scan your codes, all you need is a simple scan to connect the dots between the barcode and your data. 

So, don’t sweat the variations in these barcodes and QR codes. Go with what’s already affixed to your inventory, and don’t be afraid to mix and match barcodes and QR codes if that’s what’s easiest for you and your team. 


What are the benefits of implementing a barcode inventory system?

There are countless reasons to modernize your inventory management system using barcodes, including getting more work done in less time. Here are a few of the most stand-out barcode benefits:

Access your data in the blink of an eye

Who has time to rifle through piles of paperwork to get the details on inventory? Not you and your team, that’s for sure. 

By using barcodes, a quick scan is all you need to access every ounce of information about an item you’ve registered in your inventory software.

Reduce or eliminate human error

Even the best employees are bound to make a severe inventory mistake eventually. After all, your team is only human. 

By using barcode scanning, you bypass tons of error-prone processes, like transposing data, keeping track of items by hand, mixing up stock that looks or sounds alike, misreading serial numbers, or jumbling tiny cells on an outdated spreadsheet.

Monitor your inventory more efficiently

If you’ve got tons of inventory that comes and goes, day in and day out, you’re probably spending way too much time tracking the whereabouts of all the stock.

But with barcodes, you can slash hours of your inventory tracking strategy. When items arrive, depart, or move around, simply scan them, then update the relevant information accordingly.

Practice better inventory control

Inventory control is a balancing act: order enough inventory to meet demand, but not so much you waste money carrying any more stock than necessary. 

Implementing a barcode inventory system will make it that much easier for you to have a handle on what you’ve got and where. And tight, accurate record-keeping is the first step to truly getting the data you need to master inventory control.

Manage your most valuable assets

Barcode scanning isn’t just for inventory that comes, goes, gets sold, or is manufactured into something else. Most businesses have assets, too: think machinery, equipment, technology, even a fancy espresso machine. 

Whatever assets your company owns, barcoding them can help you track your highest-value items as they change hands or locations. 

Automate time-consuming processes

Finally, companies can use barcode systems to blaze through traditionally tedious processes like inventory counts and audits. 

Now, instead of manually counting each item, your team can use barcodes to update inventory counts quickly and research any discrepancies they encounter.


What you need to prepare your business for barcoding

So you’ve decided to try out barcode inventory software. Here’s what you’ll need to do to prepare your business physically. 

  • Barcode scanners (including smartphones and tablets)
  • Computers, including desktop or laptop
  • Barcode printers
  • Barcode labels
  • Barcode or QR code generating software
  • An inventory list, ideally one maintained digitally, like in an app

But don’t worry. This list might seem long, but everything you need to barcode your inventory is quite affordable. And many of these items your business probably owns. 

While almost all inventory software allows you to use traditional barcode scanners, modern inventory solutions like Sortly also enable your team to use existing smartphones and tablets to scan codes. This is a big deal because dedicated barcode scanners tend to be clunky, expensive, and way too easy to break. 

Same goes for barcode printers and labels. You can actually generate custom barcodes and QR codes right in Sortly, then print them onto classic Avery labels using a run-of-the-mill printer. You can purchase a barcode printer if you’d like, but it’s completely optional.

You can also add tons of details, like your company’s logo, colors, and product information, right to those customized labels. And you can pick the shape and size of the label, too. 


How to implement a barcode system for inventory

An inventory app being used on a laptop shows barcodes and QR codes being created, scanned and printed.

Once you’ve selected barcode inventory software and stocked up on the supplies you’ll need, it’s time to prepare your team for a more modern inventory strategy.

And while every business is different, we’ve found these 3 tips really help make the early days of implementing a barcode inventory system that much easier. 

1. Barcode everything

Yep, everything. If you’re going to use a barcode system to organize your inventory, consistency is key. Here are a few tips on how to barcode properly:

  • Ensure that every item in your inventory is labeled
  • Generate customized barcodes or QR codes for unlabeled stock
  • Link each barcode or QR code to an item in your inventory software
  • Ensure each item has a robust, detailed profile in your inventory software—add pictures, notes, location, and everything else that’s important to your business

By labeling every last thing your business stocks—and ensuring those codes are linked to detail-rich items in your inventory app—you’ll have created that “connectivity” between your barcodes and your data. Without this link, your barcode strategy would be pretty much pointless. 

2. Train your team

It’s one thing to create a barcode inventory system, and it’s another to actually implement a barcode inventory system into your small business’s daily inventory processes. Luckily, modern inventory apps like Sortly are super-user friendly, and even the least tech-savvy of employees can get the hang of the app in a few minutes. 

Your company should train all relevant team members on how to track inventory using barcodes. And there should be clear, written expectations about how, when, and by whom inventory should be tracked. 

By having all team members log in as registered users, managers can ensure compliance and offer training and feedback to employees who aren’t putting in the work.

3. Document your goals

Why, precisely, are you tracking inventory by barcode? Workshop those reasons, and channel them into key performance indicators (KPIs) that are actually measurable. 


Some examples of inventory-related KPIs could be:

  • Reducing deadstock
  • Reducing inventory loss or theft
  • Reducing stock-outs or customer wait times
  • More accurate inventory accounts
  • Faster end-of-year inventory audits

You’ll also want to document goals that are a little softer but just as valuable. These goals might be hard to measure, but they’re also some of the benefits that attracted you to a barcode inventory system in the first place. Examples of these goals could be:

  • Knowing where all your inventory is, even across multiple locations
  • Being able to keep customers happy
  • Not stressing over cycle counts, audits, or other inventory processes
  • Not relying on a single employee who “knows everything”
  • Getting your business (and your books) organized 

4. Get started with barcoding—today


Barcoding is an inexpensive, powerful way to transform how your business tracks inventory. All while saving you tons of time, money, and stress. Best of all, you can get your team started using equipment you already own when you choose Sortly; you can scan and create barcodes right from your smartphone and print barcode and QR code labels in minutes.

Create a Barcode Inventory System for Your Small Business with Sortly

 Sortly barcode inventory system for small business shown on mobile phone.

Barcode scanning is just the tip of the iceberg when it comes to Sortly’s inventory management capabilities. Sortly helps you track, manage, and organize your inventory—from any device, in any location. We’re an easy-to-use inventory solution that’s perfect for small businesses. Sortly builds inventory tracking seamlessly into your workday so you can save time and money, satisfy your customers, and help your business succeed. 

With Sortly, you can track inventory, supplies, parts, tools, assets like equipment and machinery, and anything else that matters to your business. It comes equipped with smart features like barcoding & QR coding, low stock alerts, customizable folders, data-rich reporting, and much more. Best of all, you can update inventory right from your smartphone, whether you’re on the job, in the warehouse, or on the go.

Want to start using QR codes for inventory management? Start a free trial of Sortly today.