Inventory Management

Whether you are into manufacturing or retail or even service sector, you have to deal with inventory. Managing inventory is crucial for any business as it can help to gain or reduce profit margins. In order to gain profit you should identify the best mix of the quantity in hand versus storage cost. Raw-materials, by-products and finished products are stored as inventory. In-terms of finished products, carrying high inventory ensures high on time delivery as the ordered products are readily available. On the contrary, it includes storage costs, insurance and taxes and also opportunity cost on cost of money tied up with inventory. And that's why you should be concerned on Inventory Management.

Why is Inventory Management so important for any business? Because it lets the business owner (or the respective person) to know, how many products they have in hand, how many sold, how many stolen, how many to buy in special scenarios (when product is running low), and also how much money they are making on the product.

Proper Inventory Management includes tracking of products you sell. This information can be used in identifying trends as in what items are sold most, in which quantities and in which time period. Further you can identify the products that don't sell well. And can make decisions on reducing the amount you order from that particular product next time.

Today inventory Management has improved with many new devices, such as barcodes, scanning devices, IR tags and software to deal with these devices. You have to be concern on all these to successfully beat the competition today. Specially in retail market, in order to keep up with the sales and trends you should know exactly how to order the right amount at the right time, know-how to eliminate products that are not making profits (non selling products) to save your storage space, time and money.

In terms of small businesses, you may not have the highest desire to maintain a separate Inventory Management System. But you can probably look for an inventory control system embedded with another system. For example ZoomBA provides, inventory module under its Accounting app. Following guidelines describes some components in ZoomBA inventory module under Accounting App.

Enter a new item

1. Go to Items and Inventory
2. Click Items under Maintenance
3. Enter relevant data and click Insert New Item

The items can be categorized in order generate informative reports on inventory which can be used for decision making for future purchases.

Adding new item category

1. Go to Items and Inventory
2. Click Item Categories under Maintenance
3. Enter relevant data and click Add New

Define reorder levels

1. Go to Items and Inventory
2. Click Reorder Levels under Maintenance
3. Select the Item and enter the Reorder Level
4. Click Update

Please feel free to leave a comment for more details until the next post.