Inventory, along with accounts receivable and accounts payable, has frequently tied up over $1.1 trillion in cash - the equivalent of 7% of the U.S. GDP. Yet despite those kinds of figures, nearly half (46%) of businesses either don’t track their inventory at all, or use a manual method in order to do so, rather than robust inventory systems.
No wonder the amount of cash tied up in inventory is so huge!
We believe that with the right tools and technology in place, businesses can free-up more capital in order to invest in growth.
So if you’ve found your tools and processes are no longer working for you (or freeing up that kind of capital), then this is why you need to switch inventory management systems right now.
Why switch to a perpetual inventory system
There are two common types of inventory management, and thus, two common approaches to inventory management software: periodic and perpetual.
Periodic inventory management refers to updating your inventory after a specific period of time (i.e. quarterly or annually), and is often used by smaller businesses that don’t have large quantities of inventory at any one time.
Perpetual inventory management is the process by which inventory updates are made continually. With every sale, purchase, return and manual inventory change, inventory levels are updated - in other words, you’ll have real-time inventory control. This method significantly speeds up the inventory process, and is a very common approach for inventory tracking software that is integrated with the core aspects of your business, including accounting, purchasing, sales and ecommerce.
Aside from being a more efficient way of managing your inventory, perpetual inventory systems also reduce the risk of disappointing your customers due to a lack of inventory or overselling items, and provide you with real-time insight so you can make more informed purchasing decisions.
There are a whole host of benefits that perpetual inventory management systems can bring to your business, which you can read about in more detail in this guide.
3 key features to look out for when switching inventory systems
With so many benefits that perpetual inventory management can bring to your business, it should come as little surprise that the key features you should look out for when switching inventory systems center around how to facilitate real-time inventory control.
There are a number of features to look out for, but these are arguably three of the most important:
1. Built-in ecommerce integrations
Built-in connectors for the leading ecommerce platforms like BigCommerce, Magento, Shopify, eBay and Amazon often ensure you’ll have robust and scalable integrations that update within seconds. No more disappointed customers, even when sales heat up during flash sales, or peak season events.
2. Integrated accounting
If your inventory levels are going to be updated with inventory stock movement, surely your accounts reports should also be updated in real-time? With integrated accounting in place, every purchase, sale, return or inventory adjustment will be automatically accounted for, ensuring you have an accurate and real-time balance sheet.
3. Multi-location inventory management
Ensure that your large inventory depository across multiple warehouses, store locations or 3PLs can be effectively managed. You should be able to hold your inventory within these locations (and see this in your inventory tracking software). You should also be able to setup rules to automatically determine which is the most optimal location to fulfill from based on things like customer delivery address, product type, and current inventory availability.
What you can expect from an onboarding process
Before switching inventory systems, you should spend some time ensuring your data is up-to-date, accurate and complete. This may mean adopting SKUs as a way of identifying your different product ranges (if you’ve not yet done so), barcoding your inventory, and completing a full inventory count.
All of this will be worth it in the long-run and ensure that your new inventory management software is working its hardest for you.
Throughout the onboarding process, you should identify someone in the company who will attend all training sessions, and help to manage the process of switching systems.
But this person shouldn’t be expected to do it all themselves. They will not only need a few spare pairs of hands on your side, but they should also be working closely with an implementation consultant (who is ideally employed by your new inventory software vendor).
Finding reliable inventory management vendors
But before even getting to the onboarding stage, your complete business requirements and needs for an inventory control system should have been thoroughly discussed, documented and agreed on before the signing of any contracts.
This will ensure that your new inventory system is able to support your needs, while even offering a few bonus “nice-to-haves” as well. It’ll also mean you’re working with a reliable and more reputable inventory management vendor.
To help, we’ve created a selection criteria template that will enable you to ask the right types of questions during your searches - for a new inventory management system, as well as a complete back-office system.
Are you considering switching inventory systems?
Request your free selection criteria template, which includes a comprehensive set of questions and requirements that you should be discussing with prospective vendors.Request the template