The 6 Must-Haves of Inventory Management for SMBs

Are you thinking about investing in an inventory management solution? Experience teaches us that startups and SMBs don’t always spend on the technology that could really help reduce their overhead and increase their cash flow. For inventory tracking, they rely on spreadsheets, if anything at all. But by holding off on spending even a little on better processes, these businesses miss the must-haves of inventory management.

Among other things, this translates to carrying too much inventory and tying up cash in overhead.

Yes, new companies tend to get by fine using the most expedient tools to help get off the ground. But at some point, such ad hoc solutions fail. And business owners don’t always realize when it’s time to make the move to something that will make their operations more efficient and cost-effective.

Excess Stock Ties Up Cash

The decision to stick with the most expedient solution is understandable. And it’s not uncommon. As a logistics expert from the US-based carrier UPS recently observed, the business challenge isn’t deciding what technology to purchase. It’s knowing when to purchase it.

“They don’t see themselves being ready for or big enough for an inventory management system,” the consultant, Mark Modesti, told JOC.com in a recent article. “A lot of our customers are trying to get by with spreadsheets, and that works to a point. But as your business grows in size and complexity, it becomes more of a challenge.”

The problem Modesti notes about this approach to inventory management, as mentioned above, is carrying too much stock. And one sign that you may be tying up cash in holding excess inventory? No back orders.

But there is a solution. Put a system in place that meets the must-haves of inventory management.

So, What are the Must-Haves of Inventory Management?

The flip-side of excess stock carries its own problems. Running out of stock can result in lost sales. And without an inventory management system in place, it’s difficult to get stock levels right.

To get a grip on inventory, look for solutions that give you the must-haves of inventory management. Thus, your inventory management system must:

1. Let you track important business metrics including stock-on-hand, stock valuation, aging stock, and forecasting.
2. Help you understand your customers better and improve your ability to convert sales.
3. Let you analyze your stock from many different perspectives, such as how quickly a product gets sold and how long it sits in a warehouse.
4. Improve your ability to save shelf-space, warehouse space, and showroom floor space.
5. Save you time and money on tasks such as locating your stock, resolving shipment issues, or handling logistics administration.
6. And it should help you make better business decisions.

Do you want to know more about the basics of inventory management? Click here to download our free beginner’s guide to inventory management. Or click on the FREE trial button and see how Cin7 gives you the must-haves of inventory management.