Accurate, up-to-date inventory management software is critical to business success. If you are looking to reduce costly inventory errors, improve your ability to meet customer demands, and lower your operational costs, the right inventory control software program is an indispensable business resource. With so many choices, finding the right program to meet your particular needs can be difficult. Understanding the different features and capabilities available to you is the first step in making sure you make the right decision.
This guide offers information on the following topics:
Inventory management software (also known as inventory control software) keeps track of all information about the items that your company builds, buys, stores or sells. Inventory management software simplifies pricing products and helps maintain the most effective stock levels. Inventory management software lets you know exactly what you have on hand and where to find it. A smart inventory control module will also alert you when it’s most advantageous to re-order stock.
Critical business benefits enabled by inventory management software include:
|Inventory costing||Provides the means of establishing the cost value of inventory for profitability tracking and tax accounting (cost methods include: FIFO, LIFO, average costing, and others)|
|Location tracking||Aids in picking/packing/shipping tasks and helps improve inventory loss prevention|
|Stock count tracking||Provides a record of the on-hand units for each SKU|
|Bar-coding||A scanning technology that allows for greater efficiencies in inventory look-up activities compared to systems that require manual part # entry|
|Serial number tracking||Allows for identification of the particular unit being sold/repaired/built etc|
|Lot number tracking||Allows for tracking of groups of inventory and is often used for management of inventory that cannot be easily tracked as individual units|
|RFID tracking||Radio Frequency Identification. Accurately track items via microchips. RFID readers send radio waves and interpret frequencies into inventory data.|
|Kitting||Allow for multiple items to be combined to form another item|
|Pricing management||Allow for the association of price info with particular SKUs and can be used for more sophisticated pricing tasks such as determining discount eligibility|
|Bill of materials||Lists material quantities and assemblies needed to manufacture an end product. Can be referred to as a “manufacturing recipe”|
|Inventory audit management||Helps reconcile inventory records with actual item stock counts|
|Color/size matrix||Minimizes the number of records required to track different product combinations that vary by color or size|
|Landed cost tracking||Looks at all costs associated with acquiring inventory (including shipping, duties, and related fees) to provide for more accurate per product costing|
|Unit of measure conversion||Handles standard conversions (eg, yards to meters, pounds to kilograms) as well as user-definable ones (pallets to cases) allowing for greater flexibility in item quantity tracking|
|Catchweight tracking||Provides for a means of managing where items are tracked by one unit of measure (for example, packages or cases) but priced on the basis of weight (or another measurement)|
|Back order tracking||Provides the ability to reserve incoming stock to meet the obligations of pending customer orders|
|Inventory hold management||Reserves existing stock to fill customer orders and helps prevent duplicate promising of inventory which can cause customer satisfaction issues and negatively affect customer retention|
|Replenishment thresholds||Provides a means of systematically specifying the stock count level which should signal re-order of the inventory item; can be connected with system alert/notification capabilities to ensure that out-of-stock situations do not occur|
|Quality metrics||Enables track information about the condition of individual inventory items, which can be used in supplier selection and other inventory related decisions|
The cost of inventory management software will depend on the:
The cheapest inventory solutions will usually be add-ons for inexpensive accounting programs such as QuickBooks, with pricing starting at around $500 upfront for purchased solutions or around $40/month for a subscription-based option. Buyers looking at stand-alone inventory systems should expect costs to go up from there depending on the above criteria.
To figure out an honest price quote for you, software vendors will usually ask the following critical questions:
In the world of inventory, there is no one set price for an inventory product. You can imagine that an inventory system that is built with handling a few spare shelves in the back of an ice cream shop is not going to be able to manage the inventory of a company that needs 5 warehouses and has over 250,000 SKUs.
While many top inventory management software options exist (as seen by the list of options at the top of this page), here are some select products we’ve dived into further to help better show you the capabilities of specific solutions.
Given the popularity of the program, many companies choose to use the inventory feature included in most versions of QuickBooks. It allows you to see what’s in stock and what’s on order.
The main inventory benefits QuickBooks provides is the ability to view quantities on hand, get real-time inventory valuation, and stay on top of your purchase orders. Quickbooks Enterprise offers more in-depth features such as bin location tracking, barcode scanning, and FIFO inventory. QuickBooks recommends syncing with a handful of 3rd party apps for more advanced inventory tracking.
What new features are revolutionizing inventory management? Are there any new technologies taking the world of inventory by storm? These are some of the most current trends in inventory technology:
End of year physical inventory counts can drive your business to a halt. Employees are often pulled off the line or asked to put in additional hours to handle it. This particular method of inventory stock verification splits the task over time in order to create greater process efficiency and inventory records accuracy. The business benefits of accurate inventory will be improved efficiency and service:
|Operational efficiency improvements||Service improvements|
|less spending on “safety stock”||fewer lost sales due to out-of-stock items|
|reduced warehouse & carrying costs||fewer delays due to back-orders|
|trust in records permits use of automation||increased sales confidence during ordering|
|fewer misplaced items lowers picking costs||fewer wrong item shipments|
73% of buyers prefer barcoding as a tracking method over RFID (7%).
The world of RFID is constantly changing and evolving, and RFID can be used in far more situations than tracking inventory in a warehouse. So much so that we were able to create a list of unexpected and awesome used of RFID back in 2014, and gain in 2018. What will 2022 hold for RFID?
Inventory data is as important as financial data, and luckily BI software has evolved to paint a picture in your inventory data to help you make a better business decision. Your inventory data can help you find out what your customers want, what areas need attention, and how much you can expect to sell.