4 business benefits of good inventory management

Inventory management can feel like a herculean task for a small business, especially if there are not enough personnel for the job. However, this administrative process can be a catalyst for your company's success.

If you are trying to grow your business, check out these four benefits of good inventory management.

Maintains healthy inventory levels

Your business inventory levels should be healthy enough to respond in times of uncertainty, but not so high that they result in excessive tax costs or wasted materials. How can you strike this balance? The key is to have a clear perspective of the ratio between sale forecasts and actual sales, as well as between purchase orders and on-hand inventory. This may sound complicated, but modern technology could be very helpful with this task. For example, with the pvot smart point of sale, you can clearly visualize your actual sales and inventory levels, as well as place purchase orders and register your suppliers easily.

Avoids inventory losses

If you do not take inventory on a daily basis, you should compare the quantity sold vs. the quantity on hand in your business at least once a month. This practice will help you evaluate your business’s losses due to defective products, returns, or even theft. Maintaining a clear tally of your inventory will keep you informed of any unforeseen discrepancies or inconsistencies and allow you to take action as quickly as possible.

Provides insights into your inventory costs

Understanding profit margins by product is of the utmost importance when running your business. Selling a lot does not necessarily mean that you generate enough profits to grow your business. Tracking your inventory purchases and related costs, as well as tracking what you sell and its profit margin, will help you maximize what your business does.

Helps your decision-making process

As previously mentioned, the best-selling product is not necessarily the product with the most profits. Besides, even if you are making a lot of sales, you may not notice that your business is also suffering inventory losses. A proper management of your inventory and costs will give you an insight into these key figures and help you in your decision-making processes. It will also allow you to run a healthy and productive operation to grow your business.

Don’t have a system to help with inventory management yet? Learn more about the pvot smart point of sale.

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