Efficiently and accurately keeping track of your inventory is crucial for business success. When a company first starts, it may be able to get away with tracking inventory using pen and paper or simple spreadsheets. But as the company grows, it will need a more advanced inventory management software to ensure it has a handle on its inventory. Due to its popularity and ease of use, some retailers are even starting with this kind of software from the get-go.
Why is inventory management software important? Inventory management software offers numerous benefits for businesses of all sizes. Using this software, companies can track and manage sales, material purchases and other processes and can use barcodes to quickly scan packages and track them. Inventory management systems involve varying levels of automation, customization and integrations to make keeping track of inventory more efficient and accurate. Inventory management can provide improved visibility across channels, enhanced control over inventory and the ability to analyze data to gain insights. Inventory management is crucial to ensuring you can fulfill customer orders accurately and on time while keeping costs low. Ultimately, it can lead to higher profits.
8 Signs You Need a New Inventory Control Software
While any inventory management software is an improvement from manual systems, not all inventory management software is the same, and you need to make sure you have the right one for your business. Products have varying levels of features and capabilities, and after using a particular software for some time, you may outgrow it.
At first, it’s easy to ignore problems, such as limited insight into your inventory or running out of stock, and brush them off as minor inconveniences. These minor issues can build up over time, though, eventually causing significant challenges.
Problems with inventory can lead to unsatisfied customers, significant losses and other issues, so it’s important to spot warning signs early. Doing so allows you to start making plans to upgrade your software to one that will help you gain the visibility into and control over your inventory you need.
When do you need a new inventory management software? Watch out for the following signs that it’s time to switch inventory management software companies.
1. It’s Been Difficult to Manage Multiple Sales Channels
When your business first started, your sales process may have been relatively simple. Perhaps you just had one sales channel, produced your products in-house and filled orders straight from your office. As your business grew, things likely became more complicated, and you may now need to know how to manage multiple sales channels with inventory management software.
Many businesses today have multiple sales channels. Having multiple options can encourage more sales, as is it gives customers the ability to choose the shopping options they like best. Many retailers today offer direct online shopping, sales through online marketplaces, in-store shopping and options that combine these two channels by offering the ability to order an item online and pick it up in a store, for instance.
You may also outsource manufacturing, manage numerous warehouses and work with a third-party logistics partner, which makes keeping track of your inventory even more complicated.
If you’re maintaining different inventories for your eCommerce store, online marketplaces, brick-and-mortar stores, distribution centers and other facilities, you may need to upgrade your software to one that allows you to combine these numerous inventories into one. The redundancy of having multiple inventories creates more work for you, can result in inaccuracies and can lead to carrying too much inventory.
If customers are asking you why the price on your website is different from the price in a store, and you’re not sure of the answer, this could be a sign that the redundancy within your inventory system is causing problems.
Another sign is having difficulty with fulfilling customer orders when multiple channels are involved. For example, you may be having trouble getting the product from your warehouses to your e-commerce customers or transferring items between stores to help fulfill in-store orders. You should have the ability to fulfill customer orders from the nearest location with available inventory.
Switching to a system that can handle multiple sales channels and multiple warehouses can save you significant amounts of time and money and lead to more accurate inventory counts.
2. Your System Hasn’t Been Supporting the Growth and Improvement of Your Operations
As your business grows and you improve your operations, you may need to update your inventory management software. If your software can’t keep up with your business’ growth, it’s time to find a more robust solution.
As your business expands, you may find that you have too many locations or too wide a variety of merchandise for your inventory management software to handle. You might also find that your supply chain is too complex for your old system. If you expand into other countries, you may need to start handling other currencies, units of measure and languages that your current system doesn’t support. If you acquire or merge with another company, you may also find that your system can’t scale to accommodate your new assets.
Your business can only grow as fast as its slowest moving component. Often in retail, the slowest moving piece is operations. If you’re struggling to keep your operations and inventory management caught up with the growth of your business, you may need to upgrade to a more advanced system. If you find yourself cutting back on sales and marketing so you can keep up with order volumes, this is an even more dire sign that it’s time to upgrade. You don’t want your inventory control system to keep your business from growing.
When choosing a new system, be sure to consider the current size of your business as well as the growth you expect in the future. If you anticipate a lot of growth in the near future, look for an easily scalable system, such as a cloud-based system. Cloud-based systems are ideal for inventory management for growing businesses because they don’t require you to host equipment on-site, which enables you to scale your system quickly and cost-effectively.
3. You Need Better Control Over Your Finances
To make informed business decisions, you need to have excellent visibility into your finances. Inventory is a significant part of this, as it often accounts for a significant amount of a company’s cash. Keeping track of how your inventory moves will also give you crucial information about sales and revenue. In addition, improving access to inventory data can enable you to predict revenue and profit trends more accurately, helping you to prepare for the future.
Do you need new inventory management software to help you gain more control over your finances? If you need better visibility into your inventory valuation, tighter control over your cash flow or improved capabilities for planning revenue and profit, you may want to switch to new software. Switching to a new inventory management software may also be helpful if you’re planning to change the accounting method you use.
Improving your inventory management for better control over your finances can help you grow your company and ensure its financial success. When choosing a new program, look for one that can integrate with your accounting software and point-of-sale system for seamless adoption and tracking. With some systems, you can even build custom integrations for your accounting tools.
4. You Often Have Out-of-Stock and Back-Ordered Items in Your Sales Channels
If you often find that you have out-of-stock and back-ordered items in your sales channels, you have another good reason why you need to switch inventory management systems. If items are missing from your inventory, especially if they’re popular products, you could be missing out on potential revenue. You also won’t be able to maximize the return on the amount of money you spend developing, manufacturing and promoting those products if they’re out of stock.
If customers find that an item they wanted to buy from your site is out of stock, they may go to a competitor to purchase a similar item. There’s an especially high risk of this today because customers have so many purchasing options online.
According to a recent study by IHL Group, retailers are missing out on almost $1 trillion in sales because they don’t have items customers want to buy on hand in their stores. The study of around 600 households and various retailers found that shoppers run into out-of-stock situations on as many as one in three shopping trips.
A leading cause of excessive out-of-stock issues is a lack of visibility into inventory levels across your channels, which hinders your inventory planning ability. You need inventory control software that can handle the number of SKUs and channels you have. Real-time inventory count updates and centralized tracking can also improve your visibility into your inventory and help you to minimize out-of-stock items in your inventory. With an advanced inventory management system, you have a centralized database that contains accurate, real-time inventory counts. They also often come with stock auditing capabilities and integrate with point-of-sale software and other systems to ensure data is always up to date.
5. Your System Doesn’t Support Mobile Operations
Today, many companies use mobile devices, such as tablet computers and handheld scanners, to help track inventory and process orders. There are many benefits to using mobile equipment. In a recent survey of 34 logistics professionals conducted by DC Velocity and ARC Advisory Group, respondents said the top reason they used mobile equipment was improved data capture and scanning accuracy, followed by improved speed and the use of a visual information display.
Not all inventory management programs, however, can support mobile operations. If you want to start using mobile devices, check whether your inventory management software can support mobile use. If not, it may be worth it to upgrade to get the benefits of using mobile devices as well as those of using a more advanced inventory management system.
Choose a provider that offers a system with wireless barcode scanning functionality. You should be able to download their software on either a handheld scanner or a mobile phone you can use to scan barcodes. This will enable you to send data to your inventory system from anywhere and improve the efficiency of your inventory tracking.
It can also be useful to have software that you can access on other mobile devices such as smartphones and tablets. Cloud-based systems are excellent inventory control systems for mobile use because they aren’t tied to on-site equipment. Instead, the software is delivered over the Internet, which enables you to access it from anywhere on any device as long as it has an Internet connection.
6. It’s Hard to Get Data You Need to Make Decisions Going Forward
Data is at the core of inventory management. Maintaining accurate data about your inventory is crucial to ensuring you can stock your warehouse appropriately and fulfill orders on time. More in-depth data, as well as the ability to analyze it, can also provide other benefits that help you make better decisions and grow your business.
Businesses across numerous industries are now using big data analytics to gain insights into their operations and customers and then use those insights to improve their decision-making. A study by IBM found that 62% of retailers believe that using information, including big data, and analytics provide a competitive advantage for their companies. Big data can help you to predict demand and, therefore, how much stock you need. It can also help you increase the efficiency of your supply chain, improve your pricing strategies, determine the optimal shipping methods and help you to identify potential fraudulent payment activities.
Basic inventory management software won’t collect in-depth data. Some systems may collect this kind of data but also make it difficult to access this data and get it out of the system so you can analyze and use it. To take full advantage of the data involved in inventory management as well as modern data analysis technologies, you need advanced inventory control software.
If you find that you’re not collecting all of the data you need or that you’re having trouble accessing the data you do collect, you may need to upgrade your inventory control system. Switching to software with improved data collection and access can help you gain better insight into your inventory and grow your business. Some inventory management platforms even let you analyze your costs, gross profit margins, restock forecasts and other metrics right in the software.
7. You Want to Add In-Store Pickup or Fulfillment
New fulfillment options, such as the ability to order items online and pick them up in the store, are gaining popularity. In 2018, 81% of Internet users worldwide ordered items online for pickup in-store, according to a recent survey. That number is an approximately 30 percent increase from the prior year. Many customers choose this option to avoid paying for shipping and to save time by avoiding in-store shopping. It also offers benefits to retailers by reducing operational costs and bringing customers into stores for additional sales opportunities.
Other options, such as shipping products directly from the store to the customer, are also becoming more common due to the speed and convenience they offer customers. You may want to start offering these kinds of fulfillment options to help boost customer satisfaction and to ensure you keep up with the competition.
If you attempt to provide these options using an order management software that isn’t designed to enable them, you may run into inventory and order processing problems. To ensure that rolling out these options goes smoothly, it’s best to upgrade to an inventory management system that you know can reliably accommodate them. If you add in-store pickup with inventory management software, you can boost customer satisfaction and avoid mistakes in order fulfillment.
8. You Spend Too Much Time on Manual Processes
If you’re wondering when to update your inventory management software, consider how much time you spend on manual processes. If this amount of time is significant, it may be time to switch.
Companies that are still using Excel spreadsheets for some processes or whose systems require employees to input significant amounts of data manually are most likely not operating as efficiently as possible, especially if they process a large number of orders. Such inefficiencies eat into your company’s profit and also cause it to take longer for customers to get their orders. It also takes time away from other, more meaningful activities that employees could be doing.
Automation can also eliminate the risk of human error. It’s natural for humans to make mistakes when doing tasks such as entering data. With an automated inventory tracking system, however, there is a much lower chance of errors occurring. Using inventory management software also streamlines the documentation process, as it stores all inventory data in a central database, rather than on numerous pieces of paper or spreadsheets.
An advanced inventory management system will automate many of your tasks, saving you time and money and improving the accuracy of your inventory counts. This will help you avoid order processing issues and give you more time and resources you can use for other business activities.
What Can You Do About These Inventory Management Problems?
Did any of these warning signs ring true for you? It may be time to upgrade your inventory management software. When choosing an inventory management software, you need to look for one that provides the features you need for a price that fits your budget. The system should also be scalable and adaptable to the unique needs of your business. You also want a provider that offers world-class customer service.
With Finale Inventory, that’s exactly what you get. Every new account receives a customer relationship manager who will provide you with training, consulting and customization. We’ll work with you to create a solution that meets your unique requirements, and training and consulting are included in each paid plan and is free during the trial period. We also don’t charge any set-up or start-up costs, and every paid plan is offered month-to-month with no long-term commitments required.
Our inventory and warehouse management software is a cloud-based platform that offers a range of useful features, including centralized tracking, stock audit tools, order management, software integrations, multi-warehouse support, barcode scanner support, restock forecasting, detailed cost analyses, extensive shipping and packing capabilities and more.
With Finale Inventory, you have all of your inventory information right at your fingertips, and you always know you’re looking at the most up-to-date data. The use of a cloud-based system means that operating costs are low, and the program also works on a range of devices, including both Mac and PC systems. Our software is designed to be readily scalable so your business can grow without having to worry about running into inventory management problems as a result.
Is it time to switch inventory management software companies and upgrade your outdated system? To discover how Finale Inventory can help you improve your inventory management and grow your business, start your free 14-day trial today.