Define Inventory Management and what it’s the Best Practices are
We can say that inventory management is the procedure of ordering, storing and use of a company’s inventory these inventories contain the raw materials management and components, finished products, same as warehousing and dealing out such items.
There is the important key function is that inventory management has a detailed record of every new or returned product such as it leaves or enters a point of sale or warehouse.
A good inventory management system has a stock moving efficiency done with the help of your store without trying up any resources. It develops sales, maximizes profits, makes better clients satisfaction and protects a unique identity that clients can remain reliable too. Inventory Management Software to Maximize Income
But it is difficult to manage your inventory because as excess or insufficient stock can lead to slowdowns in business and even it lost sales. There is good news for you is that inventory management is not as difficult as you think.
Here are we mention some best practices that to help you to master in inventory management:
- Keep track of your inventory data
Keep on track of your inventory data is a first step to make successful inventory management. This data is your great weapon which gives you the information that you need to make smart decisions.
So, the question is how you can track this data?
Here are some very general ways are mention:
- You can use pre-printed inventory brochure.
- On a computer, you can also use spreadsheet applications.
- With the help of a retail POS system that contains inventory management qualities.
At the last of these options, it requires some investments, it can save your hundreds or thousands of hours and can also minimize inconsistently. Once you have a system you can use it to apply the best practices.
You should find out how a point of sale system can help you to run your retail business for this purpose you can learn more about ELoERP retail system.
- properly set up information in your POS system
Does not matter which system you are using it is important for you to set up your time properly. If you could not capture information properly it means you are more likely to make ill-informed results. While setting up your system you must ensure to track the following:
You should keep track of each item’s life cycle from the date of purchase to the supplier from its arrival and sell dates and furthermore its costs and sell price to understand how products are moving.
- Observe which products have the highest cost:
To manage goods by margin without knowing what’s selling the most, you must have an idea about which products are producing the highest profits. To know the cost of any item checks out its original purchase orders. For a scenario of total costs, take an average of all these costs or can have assessed by individual unit costs. You must have this in your knowledge the sale price of your items, including discounts you have applied on an item. Automatically, a good POS system can do this quickly by providing reports that quickly show profit margins on inventory categories and items.
You can, if you have this information:
- You must have to pay attention to brands and dealers that provide the highest profits.
- Must know the worst and best products by their quantity and margin.
- Very easily manage your discounts with an exact account of the item price.
A single system can manage inventory:
If you are collecting inventory data from multiple sources, it would be a wastage of time and become a cause of errors. Select for a single centralized inventory management system just not only makes it easier to understand how your inventory is moving but also helps in plans for expansion to other locations.
A centralized inventory system makes enable you to:
- It can enter your inventory information just once and alternatively entering information for every location.
- It can decrease mistakes which are caused by selling the same inventory 2 times and other types of clerical errors.
- It can complete orders more efficiently and it can also display inventory levels by location.