Inventory management software
Inventory management software may give you the time to take stock in another sense – by giving you time to spend with your family, or develop a plan to take things to the next level.
What does inventory software do?
At a basic level, inventory software tracks your orders and sales to work out what your stock is. This is also known as a perpetual inventory system.
When well run, these systems can:
show your stock levels at any time
reorder stock for you
show you how much each product is making for your business.
How does inventory software work?
Inventory software works by recording your stock when it comes in – either through manual data entry or through a system such as:
SKU numbers (stock keeping unit)
RFID (radio frequency identification) tags
QR (quick response) codes
NFC (near field communication) tags
When an item is shipped or sold, your invoicing or point-of-sale (POS) software identifies the item and adjusts the stock records automatically. Think about the scanner at the supermarket checkout – that’s part of an inventory management system.
Once it knows what stock you do or don’t have, the software is able to do a number of other things, depending on its features.
Scan new items as they arrive into the warehouse and the software will automatically add them to your stock.
Items are removed from stock as they’re processed through your point of sale system.
What to look for in inventory management software
You might be able to use your accounting software for inventory management as many packages come with inventory management capability built in. So before you go spending money on a bells and whistles piece of inventory management software, check what you actually need and if your accounting software can do the following:
provide you with real-time data
streamline reordering with low stock alerts
integrate and automate all the tasks from quoting to ordering to billing to shipping
manage multiple locations from anywhere
integrate with POS software
scan barcodes, QR codes or read RFIDs
forecast seasonal demand
manage batch and expiry dates and lot tracking
handle returns and exchanges
attach documents such as photos and supplier contracts
integrate with ecommerce software
scale-up as your business grows
Chapter 7: Where to next? Tools and guides by Xero
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