What is inventory management software?
Inventory management software is an application businesses use to track, organize and manage sales of their products. They also use it to track purchases of any materials or other product production costs. This software allows employees to check when shipments arrive, where their needed materials are located and when their items have been shipped to the customer.
Using inventory management software automates the process of manually taking inventory and tracking orders. It also reduces any human error that occurs when employees manage their inventory using a pen and paper. This software streamlines your daily processes of taking regular inventory of products, giving you more time to focus on big-picture tasks and enhancing inventory tracking efficiencies.
Benefits of using inventory management software
Using an inventory management software helps you more easily keep up with the demand of your products. Other benefits of using inventory management software platforms include:
Improves order accuracy
Many retail stores experience inaccurate orders, which leads to a business holding more items on stock than needed. With inventory management software, your order amounts are more accurate, meaning you no longer need to hold an excessive amount of inventory. This allows you to get rid of most of your held inventory, reducing costs and freeing up extra space where your industry used to be.
Inventory management software reduces human error, meaning you’ll spend less of your budget and resources on fixing these errors and implementing necessary damage control. More accurate orders also mean you’ll be holding less inventory, so you’ll save on excess storage space costs. You’ll be able to focus that space and budget on purchasing new products to sell, rather than paying to store extra items.
Reports valuable data
Inventory management software systems typically have business intelligence features, like bar code scanning, that easily transfers data and builds data assets to more accurately analyze where your inventory is being sold to and which customers you’re serving. The data reports help you determine ways to make your inventory processes more efficient for both you and your customers.
These business intelligence features give you more knowledge on your products and customers, which you can apply toward your marketing and outreach strategies.
Builds stronger relationships with customers
Having software that ensures customers’ orders are accurate and timely boosts your trust and dependability with them. There are even some software systems with features that provide updates to customers regularly letting them know when their product has left your warehouse, where it’s at in the delivery process and when it has arrived at their location. This helps customers remain in control and confident that their product is on its way and will arrive on time. Satisfied customers often return to your business regularly with more orders and recommend you to their connections.
Types of roles that use inventory management software
There are several roles within a company that work primarily on managing and tracking inventory, so they regularly use inventory management software to enhance their efficiencies. These roles include:
- Inventory control specialist: This is usually an entry-level role that controls numerous aspects of inventory for a company. Inventory control specialists inspect products they receive from suppliers to ensure they’re safe to resell. They often use inventory management software to schedule and track their own product orders and to make replacement orders when inventory is low.
- Inventory manager: This role oversees the warehouse staff and inventory specialist to ensure inventory is being properly tracked and managed. They’re often the decision-makers on the team who will conclude which inventory management software is best for the team to purchase. Inventory managers handle big-picture inventory processes and address any high-level problems to develop creative solutions or strategies.
Tips for choosing the right inventory management software for your business
Picking the best inventory management software for your business depends on your business’ inventory tracking needs and what fits within your budget. Follow these tips to help you choose an appropriate inventory management software system:
Stay within your budget
Work with your accounting and financial teams to determine the best price range to stay within when picking a great software system. Some platforms cost extra, but may lack the features your business needs to be successful. Make a list of features your team needs and find software programs that contain all these features at an affordable price.
Pick a software that matches your company’s size
There are many software systems available for small businesses, while others were made specifically for larger corporations. If you purchase a software platform that’s well-suited for smaller businesses, it’ll contain features that a business of your size needs to be successful. Investing in a software system for larger companies means you may pay for features that are only necessary for big corporations.
Learn which features your customers, vendors and employees prefer
Since the inventory management software you choose impacts both your company and outside vendors or customers, it’s best to find one that contains features everyone will benefit from. Meet with your vendors to discuss which features they value the most. Send out surveys to your customers to ask what they believe will make their product ordering processes easier and more enjoyable. Talk with employees who handle your inventory to learn which features will enhance their productivity and efficiency levels.