Inventory control

Maintaining proper inventory control will allow your small business to keep up with customer demands, reduce excess cash flow needs, and improve your reputation as being on time with your orders. Having too much inventory will tie up your cash flow and you will end up losing money each day that inventory sits on your shelf. Having a clearance sale is often the only way to get rid of excess inventory. Proper inventory control will teach you how to hold just enough inventory on stock to allow for market demands.

In order to conduct proper inventory control, you must have the ability to look at past sales and predict for future sales. This process is known as forecasting. Quite simply, you are looking at the past mistakes you have made and learning from them. You will know that when you run certain marketing promotions, your sales will increase. You will also learn about certain sales cycles like holiday purchasing. The more you understand about your customers buying patterns, the easier it will be to predict how much inventory you need to keep on stock.

A great way to manage your inventory is to use programs like QuickBooks that include inventory tracking. You can specify re-order points so you can get new inventory on the way before you completely run out and you start taking back orders. Having a software program to track your inventory is a great way to plan out how much money you need to set aside to pay for inventory orders.

Depending upon the type of business you run, set your inventory levels to re-order every 3-6 months. Spacing them out further will help you avoid unnecessary trips to printers for proof checks, but it can also cause you to order too much inventory and have it sit longer on your shelves and tie up your cash reserves. Only order what you can afford and what you have foretasted for.

Depending upon the demand for your products, the order cycle process (3 months, 4 months, etc.) is a great way to keep the inventory moving on your shelves. Developing a regular order pattern will allow you to keep up with the normal customer demands, but you may need to adjust it if you have a large order or a sudden influx in orders. Always pay attention to the economy and some of the current conditions to find out what your customers are up to.

Perform regular inventory audits to make sure all your numbers are adding up. Inputting the wrong number will throw off your inventory and can cause big problems for your business. Inefficient inventory control will hurt not only your bottom line but your businesses credibility as well. Performing regular inventory checks will help you ensure that your suppliers are sending the right amount of products to your warehouse and that you have not misplaced any inventory.

Avoiding obsolete inventory by combining the older inventory with hot-selling products. This is a great way to get it off the shelf quickly. Never hold onto inventory that is not moving off your shelves, it will just continue to sit there and steal more working capital from your business. By having a clearance sell to get rid of it, you are at least going to make back some of your investment and you can avoid making the mistake of re-ordering this product in the future.

Paying attention to the market is always important when it comes to inventory control. While you may be getting ready to dump a product from your inventory, something may happen in the news that causes people to suddenly start ordering it. Even if you think some items are a lost cause, it may be wise to keep one or two on stock just in case you have a random order for it.