While it’s still possible to run an enterprise without an inventory system, you might be doing things the hardest way. However, it makes sense to maximize the value of your inventory system if you run your business on a computerized inventory system. One way is to digitalize your inventory system. An automated inventory system can help speed up record keeping and improve real-time inventory management. Here are five benefits of a digitalized inventory management system.
Perhaps you run your business on a perpetual inventory system. However, a physical count is sometimes inevitable to ensure your inventory records are accurate. One of the benefits of a digital inventory system is that it facilitates quick and accurate accounting. It’s much easier and faster to scan barcodes than recording stock numbers manually. With an inventory system, you don’t have to flip through inventory sheets to check an item. Moreover, it eliminates the need to transfer inventory records manually to the inventory database or accounting software. That helps reduce time wasted on data entry and possible human errors. Instead, it lets you upload inventory records faster electronically.
Your accounting book will probably get outdated by the time you finish updating the data on a periodic inventory system. That means you will need extra inventory books to cover the entire project if you are a manufacturer or salesperson. In short, a manual inventory system ties up storage space and resources you would have at your disposal. Conversely, a computerized inventory system makes it easier to check inventory levels in just a few clicks. A real-time inventory system lets you carry less inventory as more vendors deliver products. That’s an excellent cost saving approach.
Digital shipping systems make it easier to receive and ship orders. In fact, it leaves less room for errors compared to manual inventory keeping. With a computerized inventory system, you can scan an item into the database as received in your on-hand inventory. Moreover, you can examine each product even as you send out an order to a customer. An inventory system will allow cashiers to scan or swipe an item as they send out products to customers. However, an enterprise will need to train its staff to double-check contents of a consignment against the invoice. A digital inventory system will help eliminate numerous data entry steps and reduce human errors.
One of the critical benefits of an inventory system is that it provides you real-time management information. It stretches above and beyond inventory levels and current sales figures to include your operations. For example, it lets a company keep track of the cost of goods sold, which help measure the efficiency in which you convert supplies into sales revenue. With an inventory system, it’s easier to measure the margin you have made on the sold products. In a manual inventory system, you only know the cost of goods sold at the end of the inventory cycle after you have counted all your items physically. In between, an enterprise relies on a cost flow assumption, which may be flawed. However, a digital perpetual inventory system ensures your staffs have access to an up to date cost of goods at any time. As such, it’s easier to identify and correct a problem before it gets catastrophic.
One of the most critical advantages of an inventory system is that it enables you to simplify repetitive processes. That ultimately translates into improved efficiency and productivity. Moreover, an inventory solution ensures information flows from one department to the other with little or no delay. That eliminates errors and make sure everyone sails on the same boat at all times. Orders can mix up without a real-time communication and visibility. It’s also easy to misplace inventory and hamper productivity without a real-time inventory solution. A computerized inventory system ensures everyone is aware of what is happening at any time.
by: Mikkie Mills