How to track your inventory

n the past, companies used paper spreadsheets to track their inventory. Now, electronic spreadsheets and online computer programs have taken the place of the old system. Companies using online programs are able to access their inventory from any computer in the world and look at their inventory stock levels, ordered products, and order history. Like knowing your cash-flow situation, tracking your inventory is one of the best things you can do to run a successful company.

Building up a good inventory can be a good thing, and it can be a bad thing. Having a large inventory is great during busy times when you need to fulfill numerous orders. Having a large inventory can cause your company to lose money during slow times. The longer the items sit in inventory, the more they depreciate in value and become a liability to your company. Being able to track your inventory can help your business understand how long it will take to sell the products and if the consumer demand is slowing down. Having a good inventory tracking method can also help you decide if you have too much money sitting on the shelves that could be used for other investments.

A simple way to track your inventory is to clean up your inventory space. Create designated areas for all your different products and label them. For each box, write the quantity of the product that is in the box. Make sure you have enough room to navigate through the inventory so that no unintentional damage will happen to any of the items. Keeping a clean warehouse can eliminate lost items and damaged items. Lack of inventory space causes the warehouse to be improperly managed and it causes confusion among the warehouse manager and the sales department.

When you are organizing your warehouse, keep similar products together. For example, if you sell brochures and bookmarks, place them next to one another. This makes it much easier to find when the warehouse manager is searching for the products. Create an organized system and stick to it. Make sure everyone at the warehouse and at the main facility know where things are. This way, if they are on the phone with a different person, they can let them know exactly where they need to go to locate the products. Having the warehouse properly organized cuts down on wasted time and lost products.

After you have organized the warehouse, create a tracking system. Financial programs like QuickBooks come with inventory tracking systems that can help you control your inventory. This can reduce a lot of wasted time because you do not need to physically count all the items in your inventory. When you create an inventory tracking system, include a re-order target number. Having re-order targets reduces backorders from happening. This allows your company to be more efficient. Keeping a spreadsheet can also help you avoid ordering too much of one specific product and having an excess in inventory. Always remember that the re-order targets need to be set at a reasonable level. Each time you order a product, the cost per item will be affected. This could mean that you are only making a 20% profit on a product that you used to make a 40% profit on. Keeping track of your re-order history and comparing your sales trends to these numbers can help you get the most out of your investment.

Have a system for items that are added or taken away from the inventory. Every time an adjustment is made to inventory, it needs to be recorded. Proper inventory tracking means you understand exactly how much of each product you have on hand.