If you are trying to grow your business, check out these 4 benefits of good inventory management.
1 Maintains healthy
product stock levels
Your business inventory levels should be healthy enough to respond in times of uncertainty, but not so high as to result in excessive tax costs or wasted materials. So, 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 smart points of sale, you can clearly visualize your actual sales and inventory levels, as well as easily create purchase orders and register your vendors.
2 Avoids inventory losses
You should compare the inventory quantities sold vs. the quantities you have in your physical inventory, if not on a daily basis, 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.
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. This is why 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.
4Helps 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 about the solutions Evertec has to offer here.