How proper inventory control can positively impact a company’s bottom line

The biggest benefit of good inventory control software is the ability to understand product sales and what that means for your stock. Understanding what products are flying off the shelves versus which ones are selling slowly means you can continuously optimise how you order stock to ensure your available capital is invested wisely.

Proper inventory control removes all the guesswork and allows you to manage how your business' money is invested to maximise both cash flow and profit. We explore four ways that inventory control benefits a company's bottom line

1) Data-based business decisions

Proper inventory control provides an accurate and real-time picture of what's hwp-contentening with your stock and sales. Making assumptions about how quickly stock will sell or which items have the highest demand, can lead to big problems when things change unexpectedly.

With good inventory management software, you can see exactly where your stock levels are, and analyse factors that might affect future sales. With this type of information to hand, you can invest in the stock your business really needs, and make sure you never have too much or too little.

You also save staff wasting time by looking for products you don't have, manually doing stock checks or making unnecessary orders. It's about helping you make smart business purchasing decisions as well as understanding what your supply chain management needs and when.

Business executives making data-driven decisions.Proper inventory control allows a business to make data-driven decisions about their supply chain.

2) Fulfilling demand and customer service

For business success it's important you make sure your customer needs are satisfied, and a big part of that is ensuring you have the right levels of stock.

Your customers are crucial to your success, and diswp-contentointing them because you can't fulfil orders can really affect both your reputation and sales. Not having an item in stock when it's in demand means your customers might choose to order elsewhere, and develop a relationship with one of your competitors.

Depending on your type of business, this could mean managing stock levels of multiple raw materials from a number of supply chains, that allow you to fulfil an individual order. 

Inventory management software helps you recognise when your stock levels are low enough that you should place a new order, avoiding ever losing a customer over lack of stock. 

If you have an inventory management system that lets you analyse past sales, you can ensure you have adequate stock even when supply is likely to be impacted by seasonal demand. 

3) Positive cash flow

Too much stock means your money is tied up waiting for it to sell. With money invested in stock, you don't have as much cash to invest in new opportunities or to cover the myriad of other expenses a business incurs everyday. If your marketing team get offered a great advertising deal, for example, you might not have the cash available to leap on it until more of your current stock has sold. 

However, if you over order, there's also a risk that you won't sell all your stock, and the money you spent on it goes down the drain. Some companies opt to decrease waste by ordering just before a product is needed, and eliminate time spent checking stock levels on a regular basis.

Conversely, not ordering enough stock won't help your bottom line either. If you order too little and then run out of stock, you lose the sale and therefore your profit.

Every business needs a certain amount of cash available and getting the right balance of stock can help manage this. 

Business cash flow is important.Proper inventory management helps business ensure they have enough cash for other investments.

4) Managing storage costs

Extra stock requires a bigger warehouse or storage facility, and might mean you can't make space for something else you want to purchase. In order to manage your expenses, proper inventory control helps you utilise available space by ensuring you only have the stock you need. With a good system, you might even be able to scale down on storage space and cut costs to improve your bottom line.

ABM's inventory management system integrates seamlessly with our core business module so that you can rely on one easy-to-use system. We also provide full support and cloud-based back-up so that your inventory is always accessible. Request a free demo today.



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