Why is inventory control important?
Every business that purchases, uses and sells inventory, needs effective inventory control systems and management. From purchasing raw materials for manufacture to storing inventory, right through to selling and shipping finished products to your customers, inventory monitoring and control is essential for the health of your business.
Let us take a look at the key factors and see how good inventory control can help your business flourish.
Accurate and timely ordering
Efficient and accurate inventory control is one of the main ways you can ensure maximum profits and minimum losses. Double-ups, missed orders and inventory shortfalls can be avoided with a good inventory control system. Every factor of ordering, from lead times and supplier information to tracking or invoicing, can be monitored and controlled ensuring accuracy and increased productivity.
Shortfalls of inventory and missed or inaccurate ordering equates to loss of sales and a diminished customer experience. If customers cannot purchase from you due to stock shortage or if they experience unclear or slow turn-around times they will take their business elsewhere – a serious concern for any business, but one that can be largely cured by effective inventory control.
More capital to use elsewhere
Inventory ties up capital and incorrect inventory control loses capital. Getting inventory levels right is one of the main ways you can free up much needed cash flow for your business. If there is obsolete, unused or unsold inventory sitting around for long periods of time then it is likely there’s a problem with your inventory control. Inventory control systems can ensure that you are only holding, manufacturing and purchasing what you actually need. This way overstocking can be avoided and capital can be freed up for other uses.
Intuitive inventory control
The ultimate purpose of inventory control is to track and monitor your stock with the overall aim of increasing the productivity, efficiency and profit of your business while decreasing unnecessary costs. In a perfect world, inventory levels would always be at the optimum for what is needed. While there is always some tweaking needed from a management point of view, good inventory control systems offer real-time solutions to the ‘too much or too little’ problem. With accurate inventory control stock and product levels become useful indicators that show when adjustment is needed rather than an on-going and time consuming problem area.
If your business manufactures goods then inventory control becomes more than just the tracking of finished products. Raw materials and works in progress are factored in and monitored to provide you with an accurate picture of your inventory health which helps create better efficiency and productivity.
A good inventory control system will enable your business to run more efficiently freeing up man-hours that could be used generating new business or focusing on other tasks. Human error, laborious data entry and manual report generating can be greatly reduced saving your business both time and money.
Accurate and upsized selling
Good inventory control systems will enable the accurate tracking of back orders and stock on hand enhancing the opportunities for upselling. Sales strategies and forecasting relies on this and without accurate and up to date inventory information, your sales staff will lose sales, as well as miss out on opportunities to upsell. Sales drive your businesses profit and when it comes to sales, accurate inventory control equals accurate and increased selling.
Accurate and efficient inventory control is a must for any business that uses inventory and is one of the main ways business can increase profit and decrease losses. There are a variety of automated inventory control systems on the market so it just becomes a matter of finding the right one for your business. Unleashed has been designed to cover all the bases and provide cutting-edge inventory control with on-going development and support, as well as integration with existing software.
Unleased is a cloud based inventory management that integrates seamlessly with Xero.