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Inventory management for small businesses

 


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In this article we have outlined some simple tips to ensure that your inventory management system keeps running smoothly

From small e-commerce sites to national fashion chains, every successful retailer understands the importance of effective stock control. We have outlined some of our tips below, to ensure that your stock control is working for you.

1) Strike the right balance with your stock levels. Obviously it's important to satisfy customer demand, and keep your shelves stacked if you own a bricks and mortar business, but you don't want to have too much cash tied up in your stock. It can be tempting in affluent times to splurge on stock but you should keep a firm grip on your purse strings no matter how cash-rich you're feeling. Successful retail businesses use their stock control software to interpret trends and customer preferences and then use this data to manage their inventory system and keep the balance right.

2) Always place proper purchase orders with your suppliers when making orders. Even if they take a casual approach to ordering stock, if you have a purchase order you can cross reference it against their delivery note in case of any disagreement. Most stock control systems will generate purchase orders but if, for some reason, you are running a manual inventory system, make sure you are using a sequential, easy-to-follow purchase order system.

3) Choose the correct stock control software for your business. If this is the first time that you have purchased a stock control system, look for one that slot into your business as seamlessly as possible. One of the most important things to check is that the software you choose is completely compatible with your accounting package otherwise many of your processes will just have to be carried out twice. At es consulting, we only develop Sage-compatible software, such as Sage Barcoder so that our customers who are using Sage 50 can integrate our software with their accounting system.

4) Once you've chosen your software, make sure you don't scrimp on the hardware that goes with it. Your software provider ought to be able to supply and support the equipment that will be most effective for their software. Always allow enough time for hardware installation because this is the point where glitches are most likely to occur especially if no leeway has been left for the testing of equipment or phone lines.

5) Carry out regular stock takes whether you are using a fully automated stock control system or a manual ledger. Some retailers rely on six-monthly or annual audits but it is far more efficient to try and set aside at least an hour a week to carry out a rolling stock take or review. This way you can keep an eye on losses, through damage or theft, for example, as well as regularly reviewing what is selling and what isn't so that you can make an informed choice about which stock to buy in future.

Hugh Smith owns ES Consulting and has developed Sage-compatible, stock control software that boosts efficiency. Sage Barcoder , from es consulting, can handle all your stock control so that you can concentrate on running your business.

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