In the business alphabet, “I” is for inventory, a fairly simple concept, right? You have a product, you store it in a warehouse, and count. Not really? Now suppose you have several product components, all parts of an unfinished product. Count those too. OK, there’s more than one location: after all, you have a warehouse and a retail store, an assembly plant, and why the heck not, a second warehouse. Some locations hold finished product; others hold components, while some hold both. Oh yeah, almost forgot: you have multiple products, with multiple components. Count, count, count! This just goes to show that a simple concept can grow exponentially, and if you’re not keeping track of all of it properly and accurately, you’re in for a serious case of miscued reporting. So, short of stopping all transactions, sales and transfers while your team counts at every locale, how do you effectively manage your inventory?
Whether your name is ACME and you’re in the business of making rockets, or you’re running a restaurant with an extensive menu and 100 brews on tap, you need precise knowledge of your inventory. Why? Because, regardless of industry, having just a rough idea of what you have and don’t have is a recipe for profit loss and unnecessary spending.
For all business owners, the thought of having a precise count on all inventory, is music to their ears; however, the idea of achieving that goal is a lot more like scratching finger nails on a chalkboard. But it doesn’t have to be. Don’t worry; you don’t have to do a manual count at every location every time you want to know your magic number. Instead, implement a cloud-based solution that tracks your inventory levels (finished product, components, all locations) for you. Why look to the cloud? Implementing a cloud-based accounting solution that tracks inventory gives you the power and confidence of precise reporting. No more rough ideas or guesstimates; and pretty accurate is no longer your goal. Because you’ll be used to precision. Precision in all things, from inventory counts, to transfers, transaction and sales. When you’re precise, you’re free to spend time on other pressing matters like proactive analysis and growing your business.
[Related: Why you should be using a Bill of Materials in your company]