How to improve inventory management for multiple locations


Mismanaged inventory can lead to missed opportunities, lost customers and higher costs — problems that become exponentially larger when you have multiple locations.

Here are some of the challenges of multi-site inventory management and how the right accounting software application can help your enterprise rise above them.

The biggest multi-site inventory management challenges

Businesses of all types have dealt with unmatched inventory-related challenges over the past three years, from supply chain disruptions to shipping delays and everything in between. Other obstacles have always been a part of doing business. Some of the biggest multi-location inventory challenges include:

Visibility across multiple locations

You're the CFO for a multi-entity tire company. When a truck driver needs to replace several tires on his semi, your employees check the inventory management system and see they don’t have that brand and size in stock. The driver can’t wait a week for them to be delivered, so you’ve just lost his business.

What you didn’t realize was you’d just received an entire shipment of those tires the previous day at another location nearby.


Whether you're a retailer selling inventory as-is or using your inventory to create something else, smart pricing requires striking a delicate balance.

"Without an effective pricing strategy, companies risk either leaving money on the table or pricing their products or services right out of play," said EY's Bernard Kang.

COVID-19, supply chain and labor disruptions, and historic inflation haven't made the task any easier.

PwC's Douglas Anderson and Meghan Murray put it bluntly.

"Pricing that perfectly aligns with cost of goods or just-in-time inventory management approaches seem like quaint and distant memories,” they said.


Inventory costing is rife with the potential for missed opportunities. Without proper costing or tracking, your inventory could be overvalued and you could lose money.

It's another arena that's been complicated even further by inflation. As U.S. inflation headed toward its highest level in 40 years, PwC issued a recommendation that companies consider switching their costing method to LIFO (last in, first out) so that "inflation on items in ending inventory is included in the cost of goods sold, which could reduce taxable income significantly."

Inefficient multi-site inventory management can also lead to higher carrying costs, wasted goods and lost revenue.

How technology simplifies multi-site inventory management

If you want to overcome the challenges of managing inventory for multiple locations, you need more than basic inventory tracking software.

Small business software solutions like QuickBooks or Xero may be sufficient if you only have a single location, but as your company expands, inventory tracking becomes more difficult. You’ll quickly find yourself logging in and out of multiple databases just to see what’s in stock across the company, compile reports and analyze costs.

The right inventory management software makes the process infinitely easier. Here are a few factors to consider.

Individual location controls

The U.S. is a nation of differences, and that applies to local prevailing wages (which factors into cost of goods sold) as well as differences in what people consume.

Look for software that allows each location to control its own pricing, reordering, and stocking characteristics. That way, you can optimize processes at each location while still achieving the comprehensive visibility and reporting you need for your entire enterprise.

Multiple costing methods

When you operated a small hardware store that had no more than three circular saws in stock at any given time, the specific identification costing method, which follows each individual item in inventory from the time it's acquired until the time it's sold, might have been appropriate.

Now that there are 10 large stores with far more in stock at each location, the LIFO or FIFO (first in, first out) costing methods would make more sense.

Inventory management software that accommodates multiple item costing methods will ensure you're not trapped in inefficient, cost-ineffective processes when your business grows or, as has been the case in 2022, when economic circumstances may warrant a switch.

Inventory analysis capabilities

According to the latest PwC Pulse Survey, 53% of CFOs plan to reevaluate their company's pricing strategy. They see it as a way to protect margins in light of rising input costs due to inflation, increased labor costs, and other factors.

Given the importance of pricing when it comes to protecting and growing an enterprise, look for inventory management software that provides flexible pricing options, such as pricing by customer, customer type, item and item type, and by unit of measure, while also allowing for quantity breaks and other unique circumstances.

Access from anywhere

Being able to access multi-site inventory information from any location is one major reason to invest in cloud-based accounting software, but it's far from the only one.

According to a June 2021 PwC survey, 74% of business leaders are engaged in cloud strategy, and 56% see cloud as a strategic platform for growth and innovation.

Failing to move toward digital transformation might mean falling behind your business peers. You could also lose out on prospective team members who would be attracted to the flexibility that cloud-based software affords.

Full audit trail

If multiple employees are empowered to handle inventory management, it's imperative to have a record of who performed what task and when. Not only can accounting software equipped with a full audit trail help prevent fraud (as can role-based access), but it can also pinpoint – and help avoid a repeat of – errors in inventory management processes.

Choose a software with real-time visibility into inventory activity, and you can keep many mistakes from happening in the first place – such as needlessly disappointing a customer simply because an employee doesn't realize that your company does have the items they want in stock.

Real-time visibility can also help you avoid the arguably even worse scenario of promising the same items to multiple customers.

Help your business thrive with Gravity

Gravity Software has all of these capabilities, and then some, for smooth multiple location inventory management that helps you avoid stressful situations, keep promises to your customers and stakeholders, and end up with more money to reinvest in your business.

Multi-site inventory management has a lot of moving parts – literally and figuratively. See how Gravity's cloud-based accounting software can lighten your load. Schedule a live demo.

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