Running an enterprise is no small undertaking. You have to be on top of things to guarantee smooth business operations and boost your growth and profitability prospects. As inventory management is a critical aspect of your business, investing in tools and software that will help you effectively do this task can help shape your future success.
Inventory, or stocks of goods, merchandise, and materials for selling, is a critical aspect for any business operation. Maintaining accurate inventory records enables the business organisation to function more effectively and gauge more accurately its ability to deal with and meet client orders. Efficient inventory management tool with multiple benefits is pivotal in the overall business planning and strategizing.
As a key engine that helps power your business, inventory is closely intertwined with profits in a sense that your company’s capacity to generate income is mostly dependent on your stocks of products that are to be sold. It helps you assess your capability to fulfill your obligations to your customers, partners, and suppliers.
The importance of inventory management cannot be stressed enough for SMEs as accurate inventory tracking allows them to fulfill orders timely and accurately. Inventory management in businesses must grow as the company expands. With a strategic plan in place that optimizes the process of overseeing and managing inventory, including real-time data of inventory conditions and levels, companies can achieve various inventory management benefits.
There are many such reports that give better insights on your inventory and assist in taking confident business decisions. These reports are normally embedded in advanced enterprise resource planning (ERP) software as part of its major features. Some of the key ones are mentioned below with their primary features:
- Stock Ageing Analysis Report: Stock ageing helps you keep track of the age of your stocks. Older stocks may depreciate or become obsolete, resulting in a loss. Thus, performing stock ageing analysis periodically will help you plan and sell the older stocks first before it becomes too late. With configurable ageing periods, the report helps you see slow-moving and dead stock easily.
- Customer-wise Movement Analysis: Through movement analysis, you are empowered by learning the buying behaviour and preferences of your customers. The report aids you in targeting those customers who prefer a particular brand more over another. This knowledge allows you to push sales by offering them special discounts and promos. Moreover, by analysing the data, you will be able to know your top customers with a high sales value; engage with them frequently, and retain them with promotional offers and excellent customer service.
- Stock Summary: It is an important inventory statement that updates the stock-on-hand on a real-time basis. The report also gives you an item-wise profitability analysis and provides you a picture of the entire stock availability with inward and outward movement.
- Re-order Status Report: This one helps you prevent overstocking, among others. Through this report, you get to know which stocks you must replenish along with the right quantities. Additionally, it allows you to order fast-moving and important stocks; avoid overstocking; and make a purchase on the basis of consumption pattern in recent past. You will also know your net stock availability, including pending purchase orders and sales order due dates, by analysing the given data.
- Godown wise Auto Column Report: This report equips you to know the stock availability in each of your godowns or warehouses. The report enables you to keep tabs on stock availability relevant to a particular godown.
To get a bigger picture of the overall health and performance of your business, it helps to combine the inventory reports with the data obtained through accounting and compliance reports. These practices are a good foundation for efficient business operations.
(Insights by Vikas Panchal, Business Head at Tally Solutions in the Middle East, a leading international accounting and compliance software provider.)
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