Accurate, up-to-date inventory 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 software (also known as inventory management and inventory control software) keeps track of all information about the items that your company builds, buys, stores or sells. Inventory software simplifies the management of pricing products and helps maintain the most effective stock levels. Inventory 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 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 number of users, the deployment method, the number of warehouses, the level of inventory being tracked (total SKUs), as well as the cost of any implementation or training fees.
Generally speaking, the least expensive inventory solutions will be add-ons for a lesser expensive solution 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.
“What do you need? How big is your inventory? How many employees do you have?” If you are bothered by the sheer amount of follow-up questions when searching for pricing, you’re not alone. Don’t worry; the software vendor isn’t trying to determine just how much money he can get out of you. These are critical questions they’ll need to know to give you an honest price quote.
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.
Inventory is an available feature in most versions of QuickBooks. It allows you to see what’s in stock and what’s on order. Its main benefits are 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.
|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|