Documentation is the first and most obvious step in gaining inventory control. Essentially, you want a single location to track all of your purchase orders (incoming stock) and sales orders (stock going out). When you first start out, you may be tempted to keep track of your inventory with pen and paper. You may believe that this keeps things simple, but it has two major drawbacks:
It is difficult to replace a pen and paper without making a mess. If your company is active, your stock levels will fluctuate dramatically as you buy and sell more items… and there is only so much white-out in the world!
Paper has no backups and cannot be accessed from multiple locations because it is analog. As your company expands and more people require access to stock levels, having everyone standing around a single paper ledge can quickly become crowded.
After grappling with these constraints, many new business owners will progress to digitizing their inventory in the form of Microsoft Excel spreadsheets. Excel files can be backed up for security, worked on by multiple people at once if you use a cloud-enabled version of Microsoft Office, and are excellent for number crunching.
In Excel, you can create your own system for tracking inventory and sales, or you can use pre-existing inventory templates to help get things organized (more on this later).
However, the most significant disadvantage of using spreadsheets to update inventory is that they are not linked to the other operational parts of your business. The Excel sheet must be loaded and updated as soon as something is shipped out of the shipping room. The same is true if you receive a purchase order and need to add items to your inventory. Even though it is digital, it is a very manual process.
While this is a good start, the possibility of errors with manually updating spreadsheets makes mastering inventory control difficult. So, what are your options?
If you haven’t guessed, inventory software like systemSIA can help you manage your entire business’s operations. Consider SystemSIA to be your company’s operating system. You create a purchase order when you need stock. A sales order is created when you need to sell something. The best part is that as these documents are processed, your inventory is automatically updated!
Of course, advanced features such as barcoding, inventory sub-locations, serial numbers, and more are also available.
Furthermore, good inventory software will do some of the legwork for you. SystemSIA can notify you when your stock is running low and that you should create a purchase order to make more after you set reorder points. Let’s see what a spreadsheet can do!
Furthermore, reporting is built in to make it simple to do your accounting when tax season arrives.