6 Inventory Management Techniques to Save You Money
Did you know that how you manage your inventory plays a key role in your financial success as a business? Inventory management is the practice of keeping track of your stocked goods by counting, measuring and monitoring them. Good inventory management practices are critical for the success of any commercial business — especially when it comes to profit.
Can inventory management save money? If it’s done right, absolutely. To make sure your inventory management processes are as cost-effective as possible, take a look at the following money-saving techniques.
Tips for the Best Ways to Save Money With Inventory Management
It’s time to fine-tune your inventory management practices to contribute to your business’s financial success. Here are six things you can do to establish your inventory management correctly, cut costs along the way and increase revenue in the long run:
- Get a precise calculation of essential stock levels: Avoid playing the guessing game when you order stock. Proper inventory management means knowing exactly how much stock you absolutely need in your inventory and then using those numbers as a baseline for contingency planning.
- Always have a contingency plan: Part of cost-effective inventory management is being able to deal with unpredictable variables in the supply chain. Assess all potential risks and develop a plan to continue operations as normally as possible if you encounter sudden obstacles.
- Use only as much warehouse space as you need: Warehouse leases can be expensive, especially when an inventory requires substantial storage space. But if you find that you’re not using all the space you’re paying for or that you don’t require the same amount of space year-round, you shouldn’t be paying for as much as you are.
- Do cycle counting instead of annual counting: Performing a physical inventory check is an essential part of every inventory management process, but instead of leaving this tedious part of inventory management for the end of the year, many experts recommend breaking it down into quarterly tasks so that reconciliation can run on a rotating schedule. With a quarterly process, resolving discrepancies will be far less disruptive to business.
- Solidify your reorder level and safety stock: When you’re running low on a certain stock, you obviously need to reorder. That said, you should pick a specific reorder number to lessen your likelihood of understocking and potentially losing customers. If you’re sold out of a certain item, make sure you have safety stock available to buffer the lapse in product availability.
- Implement an inventory management system: Using inventory management software that flexes with your needs is critical for saving money long-term. Automate your inventory management and accounting processes easily with cloud-based inventory management software, and even integrate other programs such as QuickBooks. Inventory management has come a long way in recent years, and you should be taking advantage of it.
Save Money With Finale Inventory
Save money on your inventory management with Finale Inventory. We offer inventory management software that can integrate with other programs, including QuickBooks. Learn more about our money-saving inventory management software by trying out our free trial today!