Keeping control: Tips on managing inventory
Running short of a popular product or having too much inventory taking up shelf space in your warehouse could reduce your cash flow. Use these tips to improve your inventory control processes.
What's in demand?
Focus on sales, not stock. Make sure that you have enough of your best selling items in stock, with some back-up of your best sellers in the case of an unforeseen shortage. Your stock levels may need adjusting throughout the year, perhaps during peak periods or holidays.
Projecting your inventory needs may become easier as your business and customer base grow. Keeping track of daily sales is an easy way to gauge what items sell the fastest and which take longer to sell. The BDC offers an inventory turnover calculator to assist with this task.
Have an accurate account of stock
- Use the minimum/maximum system: set limits on inventory for each item. Replenish stock to those levels.
- Keep stock levels sensible. Balance the savings of buying in bulk against possible storage fees.
- Label and track inventory. Count what's coming in and going out. If possible, you may wish to put one person in charge of tracking and reporting your stock levels.
- Consider selling leftover stock through multiple channels such as overstock retailers or various online sellers. Other industries or countries might find your old stock useful.
Tools to simplify
Using an inventory management system is an excellent way to track your inventory levels. Using a cloud-based system (an on-demand tool made available to users via the Internet) is a cost-effective and convenient way to track inventory if your business has more than one location.
Bar coding your products is another way of simplifying your inventory process. Bar code systems can be used for tracking stock and don't need to be complicated to improve your inventory system. The Step up to the bar: The basics of bar codes blog offers further details on using bar codes.
When your company's money is tied up in inventory, it can't be used to help grow your business. Familiarize yourself with your customers' buying habits and keep what sells in stock.
Visit our inventory management section for inventory best practices.