Director of Marketing, SortlyShahzad Karachiwala
When a customer places an order you have to record that transaction. Or maybe your company uses its own inventory, such as tablets or gloves, for your medical practice. You also have to record any returns and any inventory orders you place from suppliers. When it’s all said and done, that can be a lot of data to keep up with on a regular basis. An inventory list with inventory management software helps you stay up-to-date on all transactions, helping your business run efficiently and cut costs.
What is an inventory list?
An inventory list is a complete, itemized list of every product your business has in stock. This includes your raw materials, work-in-progress, and finished goods. An inventory list should include each item’s SKU number, name, description, cost, and quantity in stock. The inventory list is important because it shows you exactly what you have available for sale or use, how efficiently your business is turning inventory, which items are not selling or being used, and reduces your carrying costs. It’s also important because it’s needed for income tax reporting.
An inventory list maintained by inventory management software helps you:
Track What You Have for Sale
By keeping track of all your inventory on an itemized list, you know exactly what you have in stock and are ready to sell or use. The process of fulfilling client orders (or grabbing what you need) is basically seamless. But if you don’t know which items are finished goods and ready to be listed on your website; for example, you’re missing out on potential profit. So knowing what you have available for sale is a really good thing since it means capitalizing on your inventory.
Learn Your Inventory Turnover
Inventory turnover tells you how many times your inventory is sold and replaced on your shelves over a specific period of time. Also known as the inventory turnover ratio, inventory turnover reveals how efficient your business currently is and if it’s stocking excess inventory. Without an inventory list outlining all your products, inventory costs can really get out of hand.
Find Out Which Items Aren’t Selling
Every so often, a business might have inventory that isn’t as popular with customers as expected. Too much was ordered and now the remaining unsold inventory is left to sit in the warehouse and accrue storage costs. This under-selling scenario, also known as deadstock, is one you want to avoid. An inventory list with inventory management software lets you know which items aren’t selling so that you can adjust your ordering as needed.
Spend Less On Carrying Costs
An inventory list with inventory management software makes it easy to spend less money on storage for your stock. This is especially true if you’re spending large amounts of money on warehouse costs. For example, if you know from your inventory list what isn’t moving, you can make informed choices to reduce order amounts. That way, there’s less space required for housing your inventory. You can then take that extra money you would otherwise put towards housing all that stock and invest in more immediate office needs.
Have Accurate Income Tax Reporting
Another vital aspect of an inventory: accurate year-end tax returns. In order to file these taxes properly, your business needs to have recorded end-of-year inventory correctly. This can ultimately help with your overall taxes when reporting your business expenses, such as cost of goods sold.
Keep Your Inventory List Organized
If your inventory list is organized and makes sense, then your business will have fewer hiccups and more productivity. Inventory management software makes it easy to keep a tidy, functional inventory list that grows with your business.
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