“Do I need a small business inventory software to help me manage my inventory?”
As a small business owner, there are many decisions for you to make. One important matter is deciding what part of your business to invest in with a limited budget. Should you spend money on improving your operations or perhaps engage in additional marketing initiatives? While every aspect of a business is important, one underrated item a company should never neglect investing in is inventory management.
Why is inventory management important? Inventory management helps to ensure that your small business has the correct products at the correct quantity at the correct time. Without the right products in your inventory, you will not be able to ship products to your customers and collect payment. If you do not properly manage your inventory, it will not matter if you have the best products or a rock-star sales team. You need to get products into your customer's hands to be profitable. Not to mention, proper inventory management can help you maximize your sales and minimize costs, at the same time.
If you are not sure if you need to improve your inventory management capabilities, take a look at the below questions:
- Have I lost money because of stock-outs or overstock on specific products?
- Have I lost customers due to stock-outs, incorrect fulfillment, or other inventory-related issues?
- Have I encountered inaccurate forecasts, purchase orders, or other planning activities due to discrepancies in my historical inventory data?
- Am I, or is someone on my team spending a significant amount of time managing orders and inventory? For example, putting together reports, gathering insights, checking for errors?
If your answer to any of the questions is “yes,” or “I am not sure,” this is the right article for you.
Allow us to share five ways inventory management software helps small business owners solve pressing business issues and focus on growth.
1. Automate Inventory and Administrative Tasks
Currently, you may be managing your inventory using one or more spreadsheets. However, this is an inefficient and time-consuming method to manage your inventory. It is also challenging to maintain in the long term, for a number of reasons.
First, managing inventory manually using spreadsheets often leads to a messy and disorganized workflow. Multiple worksheets containing similar information, being used for different functions, can confuse users. Users get lost when they have to sift through many spreadsheets to find just a single piece of information. Manually entering the same data across multiple worksheets is also very time-consuming.
Second, using spreadsheets leaves your organization prone to errors. F1F9, a financial modeling and training firm, found out that that 88% of all spreadsheets have errors in them. These mistakes typically arise as a result of human error. For example, an employee might mistype data during the copying and pasting of order data from an order spreadsheet to an inventory spreadsheet. Data also gets misinterpreted when it is transferred or linked across worksheets, or even between different tabs of the same spreadsheet.
Using an inventory management software helps to eliminate the problems mentioned above. By centralizing your inventory and order management from multiple sources to one place, your business can function more efficiently. Access to workflow information also becomes easier. Duplicate or triplicate entry become distant memories of the past. Most importantly, using numerous spreadsheets to store inventory data become unnecessary. You will be able to gain back ten to twenty hours a week with a more efficient workflow. With more time, you can now focus on growing your business, while reducing the number of errors in your operations.
2. Access Real-Time Information, Anytime, Anywhere
Inventory management software provides business owners the ability to have all their inventory data in one place. This "single source of truth” concept is critical for organizations of all sizes – to know with no uncertainty that your data is correct, and data from other sources, when not in alignment, is incorrect. With the ability to always trust your inventory data, you can make an immediate business decision based on accurate, real-time information. For example, you can quickly check if you have enough stock to fulfill a large customer order on-time. At any point during each business day, you have an overview of your inventory on-hand and order commitments. And it only takes you seconds to check the total sales achieved, and variable costs required to make those sales.
A healthy cash flow is vital for any business. In addition, inventory management software that offers the ability to enter payments can aid you in keeping track of your customer’s payment status. When a customer orders from you again, you can evaluate whether you should continue selling to this particular customer or implement a stricter credit term depending on the customer’s payment history.
3. Integrate and Sync With Other Applications in Your Workflow
Managing your inventory without inventory management software often creates an intricate web of receiving and fulfilling orders. Individuals must enter data manually, often across different spreadsheets. Using many various applications to manage your inventory and overall business can be just as difficult as using multiple spreadsheets. When your applications, like spreadsheets, are not “talking to each other,” this results in duplicate or missing data entry. These errors can be costly for your business.
A modern inventory management software helps your business stay more connected by integrating separate applications together, for example, your sales channels, your accounting application, your fulfillment software, and your CRM. Your data is then able to flow automatically from one system to another, creating a streamlined workflow. For example, when a product gets sold in your eCommerce store, the information gets sent, digitally, to your inventory management software. The software then pushes the relevant information to your accounting applications to update your accounting status. At the same time, it also pushes orders to your shipping applications to help with shipping fulfillment. Lastly, the order data can be synced to your payment applications for your customers to pay you online. This creates an automated and efficient workflow for your small business. You can avoid countless hours of manual entry.
4. Surface Business Insights For Future Forecasting And Planning
As a business owner, you must constantly plan for the future, not just focus on what's directly in front of you. However, a small business owner often does not have the time or resources to compile inventory data and quickly come up with insights for demand forecasting or business planning.
Inventory management software can assist you by helping you to auto-generate reports for sales, production, packing, and more. With reports and analytics from sales data available at your fingertips, you can analyze your business performance efficiently. Using inventory software to combine sales history with sales estimates for new product extensions allows you to forecast demand for future inventory production. You can investigate your underperforming products and take action against them to improve your sales.
5. Scale Profitably
As a small business, adopting an Enterprise Resource Planning (ERP) system like SAP or Oracle is prohibitively expensive. It is incredibly costly to license. Moreover, the time and money required to support and maintain the ERP system are unprofitable for a small business. And there are many features a small business would not need. Cloud-based inventory management software applications can deliver everything a small business needs, at a fraction of the price of an ERP. In addition, with most inventory software pricing based on tiers of functionality and support, if you select the right software, you can grow with it. For example, if you are a small company who has one warehouse, you might purchase the basic tier of an inventory management software which supports one warehouse at a lower subscription price. As your business grows and you expand into more warehouses and more products, the software can scale with you and accommodate your growing needs, all while offering you an affordable price.
The one takeaway to remember, when it comes to the benefits of inventory management software for your small business is: it enables you to trust and use your data better, to save unnecessary resources spent on managing inventory, and to run a business more efficiently.
If you are a small or medium business, we have the perfect solution for you. Sweet is an inventory management software that can help your business to manage your inventory.
Here are some of Sweet’s unique features:
- Order management
- Automated Invoicing
- Lot tracking
- B2B eCommerce Portal
- Reports and Analytics
- Integrations with Quickbooks, Shipstation and many more
Don’t just take our word for it. Here are what our customers have to say about Sweet.
“Sweet has changed my business completely. They have made it less stressful and allow me to have the time to concentrate on my business and not on tiresome paperwork.”
Sam (Managing Director of Ma Bakers)
“Sweet has helped us in integrating all our different accounting and shipping systems together, making it simple for us to manage orders. With Sweet's help, we have saved 6 hours each week in managing our orders”.
Peter (Director of Operations for Dona Chai)
Do click here to find out more about what Sweet can offer for your business. Try Sweet now with a free trial, or you can set up a demo with our inventory experts to find out how Sweet can help your business.