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Your Guide to Inventory Management Software

Your Guide to Inventory Management Software

Inventory management software is a must for developing a process for inventory tracking and management, especially as your business grows. This is how inventory management software works.

  • Inventory management software gives you visibility into your entire inventory, helping you maintain optimal quantities to continue fulfilling orders without having too much of a particular item.
  • Inventory management software automates critical tasks and reduces the possibility of human error, especially through integrations with key systems such as accounting software and point of sale solutions.
  • The functionality you need in inventory management software will be dictated by your industry and the circumstances of your day-to-day business operations.
  • This article is aimed at business owners who want to improve the way they track, maintain and order new inventory, as well as automate important tasks and improve their accounting skills.

mediaindonesia.net– Inventory management is critical for any business that keeps a stock of commodities or commodities close at hand. Although inventory management has historically been a manual process, modern technology has eliminated the need for a labor-intensive and error-prone manual inventory management system. Inventory management software is available today to streamline the process, reduce errors, and help companies optimize the way they stock and order the products they sell.

What is inventory management software?

Inventory management software is a tool that automates aspects of inventory and warehouse management, simplifying the tasks required to effectively monitor inventory, manage order replenishment, and update accounting data.

“Basically, [inventory management] software should tell you at any time what is happening to your stock,” said Mohammed Ali, CEO of Primaseller. “This software is what we call ‘mission critical’. If it doesn’t work for a few hours, you’re in real trouble. ”

Because inventory management software is so important to a company’s day-to-day operations, it’s important to select a solution that is reliable, effective, and with the features you need.

How does inventory management software work?

Today, most inventory management software is cloud-based, and that’s what most experts recommend. Cloud-based software does not require server or IT staff maintenance, nor does it require you to set up your cybersecurity plan. Instead, the cloud-based software is managed by the software company, so it’s important to choose a provider that maintains high standards of service. Cloud-based software is usually provided as a monthly subscription, and by choosing a reliable vendor partner, you can significantly reduce the software management burden.

“You have to have a cloud system,” said Ali. “In 2020, if you are still buying software, you have to install it on your computer, you are doing something wrong. It should be cloud based or web browser based, so you can view it on mobile devices. ”

You can expect to pay a monthly subscription fee to access cloud-based inventory management software. In general, Ali said, these fees range from $ 100 per month for simple systems to $ 3,000 per month for advanced platforms. For the most part, he added, this depends on the size of your business, including the number of positions a system needs to cover, the number of orders received, and the size of the inventory you have on hand at any given time.

Inventory management software includes features that support tracking of items as they enter and leave storefronts and storage facilities, a process known as inventory control. They include features that can help you keep the right amount of inventory at all times. Plus, they include integrations that can track orders in real time and automatically update your accounting software.

What are the benefits of using inventory management software?

Inventory management software can streamline the inventory control process by tracking inbound and outbound goods, whether you are a retailer, manufacturer, or wholesaler. Good inventory software, backed by comprehensive inventory management processes, updates in real time to give you a complete view of existing inventory, even if it’s spread across multiple locations. [Read the related article: 7 Inventory Management Techniques]

“Inventory management is all about controlling your inbound and outbound inventory, as well as maintaining that inventory,” said David Singletary, CEO of DJS-DIGITAL. inventory traceability

Inventory tracking

Inventory management software integrates with other key systems to improve inventory control by tracking your inventory in real time, showing you where it is and how it moves through your ecosystem. This eliminates human error in the process, something a manual spreadsheet system is known for.

“When it comes time to sell that part, knowing where it is is very useful,” Singletary said. “The system needs to tell you to go to the exact location of the product [and] follow it as it moves from your location to the customer’s delivery door.”

reorder

Inventory management software, at its best, not only gives you a clear record of your entire inventory, but can also make reordering easier to make sure you never run out of key items. It can also be set up to help you order enough items to continue fulfilling orders without having “out of stock” or so much inventory that they run out or sit idle on shelves for an extended period of time.

accounting integration

Many inventory management systems integrate with your accounting software or have built-in accounting capabilities. This prevents double entry of data and eliminates another possibility of human error and confusion.

What are the key features to look for in inventory management software?

When choosing inventory management software, it’s important to consider your industry and the unique circumstances of how your business operates. Some inventory management software is designed specifically for retailers, for example, and lacks some key features that manufacturing companies need. Understanding the features you need before buying is the key to making the right choice.

“A retailer will have a very different set of needs than a manufacturer,” said Bryce Bowman, founder of People First Planning and independent business consultant. ”

According to Bowman, retailers should look for the following features in inventory management software:

  • Point of Sale Integration: An integration with your point of sale system helps retailers automatically track when a product is sold, whether in a physical store, on an e-commerce platform, or through another sales channel. When a product is scanned or picked up in an online shopping cart, the store system automatically updates the inventory management system, accounting for the sale in real time. Coupled with automated order replenishment, this feature allows retailers to ensure they always have an adequate amount of stock to fulfill orders quickly.
  • Inventory Catalog: For retailers, it is important to be able to catalog inventory not only by unit type, but also by distinguishing features such as size, color, and other distinguishing characteristics. For example, if you sell shoes, you should be able to specify the shoes down to the specific type; your system should identify if you have a quantity of 10 Nike Air Jordan 1 size 11 in black, five Nike Air Jordan 1 size 10 in red, and so on.
  • Auto-reorder: When your inventory level is low, it’s important to order more with enough lead time to avoid running out of stock, especially for your best-selling items. Many inventory management systems offer automatic reordering; it is sufficient to set the minimum quantities for each item and, when this number is reached, the system will automatically generate a purchase order to be sent to the supplier to update the stock level. Intelligent inventory management systems can also automatically optimize reorder points and order quantities per item based on historical sales data to maintain inventory levels at ideal quantities. Ecommerce
  • Integrations: Most retailers now sell across all sales channels – physical storefronts, ecommerce websites, online marketplaces like Amazon, and more. It’s imperative that your inventory software tracks sales across all channels so you don’t accidentally try to fill more orders than you have in stock. Integrations with your e-commerce channels will help you avoid this problem.

Manufacturers tend to have more advanced needs, as they have to keep track of raw materials and finished products. According to Bowman, the key features that support production inventory management include:

  • Product Cost Analysis: Product Cost Analysis tools not only track raw materials and finished products, rearranging necessary components when they reach minimum levels, but also help predict labor and operating costs, such as purchase of machinery and maintenance costs. Look for an inventory management system that can generate a BOM that includes a description of all these costs.
  • Forecasting: Forecasting is the process of analyzing historical production and sales data to predict what your future order management needs will be. A forecasting tool can help improve the accuracy of this process. Software with a forecasting function will analyze your data to determine optimal reorder points, hiring recommendations, and even the shifts needed to meet your goals and keep growing.
  • Ecommerce Integrations – Ecommerce used to be for retailers only, but today more and more manufacturers are selling directly to consumers. Finding inventory software with eCommerce integration is also important for manufacturers, even if they don’t currently sell directly to consumers online, as they may be using it to make it easier for their retail customers to sell, or they may even expand to include upselling. . channel in the future, Bowman said.

Finally, warehouse inventory management is a specific subset of larger inventory management software and comes with its own key considerations. Bowman suggested looking for the following features in a warehouse inventory management system:

  • Barcode – The barcode is the function used by warehouse management systems to track products entering and leaving storage facilities. Workers can scan newly received items, scan them when moved to a specific aisle and bin, then scan them again when ready to ship, automatically tracking all movements. There are multiple barcode methods, including serial tracking for high value items and batch barcode for low cost, high volume items. Some barcode functions can be performed with a simple QR reader on a smartphone, reducing the overhead associated with the scanner hardware.
  • RFID functionality: By placing RFID tags on items in your warehouse, you can track movements without scanner hardware. RFID tags and readers, placed throughout the warehouse, automatically track products as they approach a reader, eliminating the need for a worker to manually scan items in and out. This further simplifies the order management process and eliminates the risk of a worker forgetting to scan an item and losing it in the process.
  • Inventory Management Integrations: Although warehouse management is a subset of a broader inventory management strategy, the two are closely related and need to be integrated. Look for a warehouse inventory management system that integrates seamlessly with your broader inventory management software; most vendors offer this option.

The best inventory management software companies

There are many inventory management software vendors, so it’s important to do your research first. Avoid untested suppliers with poor name recognition. If in doubt, ask for references from other companies like yours. “I’d avoid startups I’m not familiar with,” Bowman said. “Find other businesses in your area. What are they using? Talk to them and ask how it works for them.”

Here are some of the most prominent and popular inventory management software vendors on the market:

  • Acumatica is a comprehensive Enterprise Resource Planning (ERP) platform that includes inventory management and accounting capabilities.
  • Cin7 inventory management software is suitable for medium to large businesses that need an easy-to-use system to support inventory tracking, reordering and accounting.
  • Lightspeed is a lightweight yet powerful point-of-sale system with integrated inventory management software, suitable for small businesses, especially those in the retail sector. It offers integrations and APIs with many of the leading accounting software programs.
  • Oracle NetSuite inventory management software is ideal for large enterprises, although it also offers a basic pricing package. It also includes a useful unified accounting platform for monitoring your finances.
  • QuickBooks accounting software offers relatively limited inventory management features with its Plus and Advanced plans. For small and medium-sized businesses that already use QuickBooks for accounting, it makes sense.
  • SAP is the go-to ERP platform and inventory management software for large enterprises and enterprise-level companies. It is complex but extremely complete: it can do it all.
  • Syspro offers flexible inventory management software and an ERP platform suitable for businesses of all sizes. It includes a powerful reporting tool that can be used to check inventory and accounting.
  • Zoho Inventory is inventory management software that integrates seamlessly with other Zoho products. It’s best for companies already using Zoho’s suite of software solutions.

Inventory management software can help you improve the way you track products as they move through your ecosystem and supports your order management capabilities by automatically replenishing inventory without overshooting. Implementing inventory management software is critical to reducing human error and helping your business grow successfully.

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