Managing inventory can be a very challenging and complex task for any business. When you don’t get it right it can be expensive as inventory is “money on the shelf”. You have invested your hard-earned cash – think of those items on the shelf like gold bricks or one hundred dollar bills.
If it “falls off the back of a truck”, or is damaged, lost, or stolen this is like driving down the street and tossing out one-hundred or one thousand dollar bills out the car window!
Today, even for a very small business there are some fabulous real-time, cloud-based inventory management systems available at a fraction of the cost of in-house server based systems from a few short years ago.
And because of economy of scale, and the ability to link into other cloud-based software programs the scope of what you can do is simply amazing!
Here are some benefits of converting to a cloud-based system…
Provide Better Customer Service
With a real-time system you will know what is in stock immediately. You can check stock levels from your computer, on a browser anytime, anywhere. You could even check from a tablet or your smart phone!
Being able to respond quickly to customer’s orders and enquiries with a quick online check – “yes we have that in stock” – will really help you to provide an awesome customer service experience.
As well, keep reading below for how it looks from a customer perspective using an online shopping portal.
In the “old days” most companies with inventory managed their stock by tracking it on in-house servers and desktop computers. Some of that legacy software, while serving a purpose at the time, was pretty clunky and unreliable.
Users would check on stock availability and often could never rely on the figures inside the system.
Simple, inexpensive software like Quickbooks had inventory modules built-in that were actually pretty good but just not robust enough for a larger company with many transactions.
And the legacy software could get very, very expensive – in the range of $100,000-$200,000 for installation and setup was common.
Other, hidden costs were:
- Managing in-house servers;
- Software support and updates;
- Data management and potential loss of data when restored backups failed;
- Possible hardware failure.
On the other hand, cloud-based, very robust, multiple-user software can be much less costly. There is no need to own servers, do backups, or pay for revisions or support (all inclusive).
More Reliable Real-Time Reports
The best part of this evolution in inventory management is getting reports in real-time that are a snapshot of your day-to-day activities.
For instance, the second you record a sales invoice to a customer, the inventory is immediately reduced, and the cost of that item is recorded as a cost of goods sold on your Income Statement.
That means you know right away the stock levels and what your gross margins are!
A program we recommend and use with some of our clients called Unleashed will not allow you to sell an item you do not have in stock. In other words, it does not allow for negative inventory quantities.
This sets off appropriate alarm bells like – why don’t we have stock on hand? Was it lost, stolen, mis-counted, or was a Purchase Order not received? When the answer is found the correct action can be taken inside the system to mirror the actual inventory reality.
Less Risk/No Backups/No Servers/ No Data Loss
As mentioned above, the stress of managing servers (which are always out-of-date in about 2-3 years), doing backups daily, testing if backups work, software going bad, paying heavily for software support, can be huge.
For myself, before cloud-based accounting was available we had to manage a mini-server farm and believe me it was very stressful when there was a breakdown (even with a company managing the servers for us). It has been a huge relief to move ALL our clients to the cloud, allowing us to work from anywhere in the world with ease.
One of Unleashed Inventory software’s clients has a coffee company in Australia with farms in Kenya and the owner can spend months in Africa and check his inventory levels daily!
Match Inventory to Actual Counts Quickly
With real-time inventory in a cloud-based system it should be an exact mirror of what is on your warehouse shelves.
You can easily do spot checks and adjustments.
By recording any adjustments in a separate cost account, you can easily see where errors are and investigate why stock adjustments were being done.
There could be these reasons for an adjustment:
- Breakage or spoilage
- Miscounting at last count
- Goods were sold but not shipped yet (and should not be counted)
Manage Multiple Locations
Unleashed software, and most cloud-based inventory software can track your inventory at multiple locations with ease in real-time.
Again, keep in mind, you can see what is going on from any internet browser, tablet or smartphone.
Connect to Multiple Sales Channels
The most amazing breakthrough in cloud-based inventory management is the ability to link your inventory management system to various online shopping channels.
This makes your small business just like a mini-Amazon!
Customers can order goods through your website portal, or Shopify, Woo Commerce, Amazon, and many others and actually see your stock levels for various products and order online.
When a customer places an order the inventory is parked aside and not available for sale.
Once completed, goods are picked and shipped, an invoice is sent, and the stock level is adjusted down for the sale.
Wow! All like magic, as I said like a huge company.
Unleashed even offers its own online portal that links to the back office software.
For those of you reading this who operate a business with significant levels of inventory I highly recommend looking at a program like Unleashed to manage your inventory.
If you would like to find out more about this user friendly program please feel free to reach out to me.
Thanks for reading…