Inventory Management Best Practices for Small Businesses
Inventory management is an essential aspect of any business that sells physical goods. It involves ordering, storing, and tracking a company’s inventory, ensuring that raw materials, components, and finished goods are used effectively and efficiently. Proper inventory management is crucial for a business’s cash flow, particularly those dealing with perishable goods. It allows business owners to keep track of expiration dates to avoid spoilage costs and protect consumers’ well-being. For non-perishable items, inventory management enables business owners to make informed decisions about storage, restocking, and stock control.
In addition, inventory management plays a vital role in customer satisfaction and business growth. By delivering orders and fulfilling demands on time, businesses can build strong relationships with their customers, increasing the likelihood of repeat business. With steady revenue growth, it also becomes easier for a business to expand its operations.
Effective stock management can be challenging for many businesses. Other than preventing a company from forecasting its sales and inventory needs, ineffective inventory management can cause lost sales, stockouts and backorders. Furthermore, it can lead to increased costs in warehousing, shipping and handling, and employee overtime costs for managing inventory.
To avoid these issues, it’s important to regularly review and improve your inventory management strategy. Here are a few tips to help optimise your inventory management.
- Organise inventory by classification
Organising your inventory by classification can improve efficiency and prevent confusion. Common factors used to classify goods include price, expiration date, SKU, item condition, age, and sales history. Implementing a system using colored stickers also helps maintain consistency and makes it easy to identify and locate items.
- Use a cloud-based retail inventory system
A retail inventory system allows for real-time tracking of inventory levels as business owners can access their inventory database remotely. Additionally, storing data digitally reduces the risk of storage issues and errors in accounting. Advstock Inventories offers
stocktaking apps for food and beverage businesses, stocktaking apps for bars and clubs of all kinds, stocktaking apps for pharmacies, and stocktaking apps for convenience stores. The small business stocktaking apps are user-friendly, easy to set up and available on both Apple and Android app stores.
- Plan for buffer stock
Maintaining a surplus of inventory can help your business handle fluctuations in market demand and trends. Having extra stock on hand acts as a buffer against stockouts
allows for unexpected increases in demand, and can make up for inaccurate market predictions.
- Conduct stocktake regularly
Performing regular inventory checks can help detect any discrepancies between the current inventory and previous inventory records. Additionally, it helps prevent theft and fraud, reducing the risk of financial loss. Our small business stocktaking app allows you to conduct inventory checks at least once a month at a minimal cost.
- Use a barcode scanner
A barcode scanner can help with stocktaking by significantly improving the speed and accuracy of inventory counting. It also eliminates human error when counting items manually and eliminates the need for manual data entry, reducing the chances of errors. Advstock Inventories offers advanced technology-based solutions to optimise your business operations. Our custom stocktaking solutions are designed to be user-friendly and adaptable to your specific needs, including a Barcode Inventory System. With our help, you can streamline your inventory management process.