how to track inventory for small business

#How to track inventory for small business how to

The inventory management process involves tracking products, raw material, and other supplies across the entire chain that consists of suppliers, production department, and sales team, with an end goal of providing a smooth and seamless experience to your customers. Key Stages in the Inventory Management Process But at the end of the day, it all comes back to your stock and related components. It can include sales forecasting, differentiating between dependent and independent demand, and more. The inventory management process can go as deep as needed, depending on the size and nature of your business. How Does Inventory Management Work?Īt a basic level, inventory management involves controlling and tracking stock as it is purchased from suppliers, manufactured in your facility, stored in the warehouse, and then finally handed over to your customers. Moreover, inventory management can also help in avoiding oversupplying so you can use the same funds for a better purpose instead of tying them up in excess stock. By properly managing your inventory, you can ensure that your customers’ desired products are never out of stock. The purpose of inventory management is to ensure that the inventory is consumed as effectively and efficiently as possible. From purchasing raw material to selling finished goods, the inventory management process governs the entire process to ensure that you have the right quantity of the right item at the right location and time. In simple terms, inventory management refers to how you track and control your business’ inventory as it is bought, manufactured, stored, and sold.

#How to track inventory for small business how to

In this article, we break down the concept of inventory management entirely, discuss some tips to improve inventory management, and also explain how to select the right inventory management software for a small business. The fine line between these two is what is know as effective inventory management. When your inventory management is faulty and out of control, it can affect the core functions of your business in the form of supply shortages or oversupply. In theory, it sounds quite simple keeping your inventory levels in control by knowing how much you already have at hand and evaluating how much more you need.īut in reality, it is not as easy as it sounds. One of the most integral parts of managing a business is driven by important inventory management KPIs.Įffective inventory management is the foundation of any product-driven business. Whether your business is just starting out or has been in the market for quite some time, it is important to keep a track of the key performance indicators (KPIs) as they can help ensure that you are on the right track.