4 Reasons Why Keeping Track of Inventory Is Important to a Small Business

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Your inventory is where a lot of your business’s money is cached. It’s potential income and also potential loss if you don’t sell it. When you keep paper records of your inventory, you’re crippling your business because you can’t evaluate your inventory in real time. Paper records are harder to back up, harder to examine, and have a high potential for sustaining damage. Here are four important reasons for digitally keeping track of your inventory.

Know What You Have and Need

If you are running a small business, your inventory storage space is not an infinite number of shelves where nothing ever goes bad or gets damaged. You have a finite amount of space, and you need to use that space intelligently. That means keeping detailed records of what you have and how much of it you need.

Buying inventory is a careful balance of predicting what you’ll need, when you’ll need it, and how much you’ll require so you don’t run out of the things you sell quickly. You also have to take into account the products you don’t need to order as often, the products that may perish or go out of style before you use them, and how much space you have for everything. The process of storing inventory is complicated enough when your records are impeccable. Don’t make it harder on yourself by trying to keep paper records, or worse, by keeping no records at all.

Respond to Customer Needs Quickly

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When the inventory in your stock room is a mess, responding to customer requests is difficult. How long will they wait in your shop while you dig around in the back? Do you even know if you have the item they’re looking for? Digital inventory records make it simpler for you to respond to customer needs, especially if you organize your stock room using an app like Stockroom Management. Whether this person is visiting you one time and looking for a special item, or wants to make a weekly stop at your shop for a consistent order, you need digital records to serve that customer well.

Search Your Stores Easily

Searching through paper records for items is time-consuming, and may yield inaccurate results. Whether you’re checking your stock for a customer or figuring out what you need to reorder, digital records tell you in real time how much of each product you have in stock. Instead of heading to the stock room to count boxes and bags, you simply check a digital list to figure out how much of something you have or need to order. It’s easier to keep track of how much you ordered last time, too.

With some simple data entry combined with vendor management, your inventory becomes a searchable, backed-up document. Go for a system that integrates with as many business aspects as possible. Sage 50 accounting is easy to use because it works with your finances, your inventory management, your projects, and more, while offering scalability as your business grows.

Evaluate Orders as You Use Them

Let’s say you run a bakery, and the milk you ordered went sour a week before its expiration date. With paper inventory, you might not be able to track that mistake and contact the vendor in time to rectify the situation. You could end up dumping money down the drain, literally, with that bad quality product because you didn’t keep track of when you received it.

You want to constantly evaluate your inventory, including quality and price, as you use it. That way, you’d know if that milk went sour because someone forgot about it or because the milk vendor made a mistake and shipped it too late. Plus, when you notice you’re running out of something faster or slower than usual, you can adjust your ordering methods in real time and not at the end of the month when you’re poring over all your papers.

You’ll save time, money, and headaches if you keep digital track of your inventory. Your small business depends on your efficiency, so don’t let messy paper records cause any glitches in your system!

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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