If you are searching for inventory management tips, then you have come to the right place. The process of managing inventory involves sourcing, storing, and selling raw materials, components, and goods that are the end products. Accordingly, inventory management consists of finding or procuring the right quantities of products at the right time, at the right cost, and at the best price.
What is a Stock Summary?
A stock summary provides real-time information about the stock levels at a given time. This is one of the primary inventory reports that are presented on a real-time basis as transactions are recorded.
Providing information about stock groups and showing the quantity details, rate, and closing value for stock items within them, the stock summary includes stock information. This report provides a comprehensive overview of stock reports. For this reason, it is the main stock statement that the company uses to know how much inventory it has.
What is Inventory Management?
What do you mean by inventory management? The management of inventory involves the systematic procurement, storage, and sale of raw materials and products as well as finished goods. Managing inventory means keeping the proper amounts and types of stock at the right places, at the right times, and at the right costs and prices.
Types of Inventory Management
Here are some of the different types of inventory management systems:
- Dropshipping and cross-docking
- ABC inventory management
- Bulk shipments
- Cycle counting
- Just in Time (JIT)
Benefits of Inventory Management
Here are some of the advantages of inventory management:
- Reduced risk of overselling.
- Greater cost-savings.
- Avoidance of stock-outs and excess stock.
- Improved business negotiations.
- Better product visibility in the event of a recall.
- The ability to make more profitable business decisions.
Advantages of Having Stock Summary Report
There are many business reports you should review, but the stock summary report is one you need to look at definitely. This report summarises what you have in stock in terms of quantity and value. This helps you make vital inventory-related decisions very quickly.
1. Be aware of the details of your stock
A detailed overview of the stock flow is available, including the number of goods entering, the number of goods left, and the number of goods closing. This report provides you with accurate information about your inventory regarding stock replenishment or inventory ageing. In the item movement section, you can see changes in the movement for a given day, a particular month, or any given time.
2. Identify how the stock is sold and purchased
It’s possible to view the quantity of stock available at various retail outlets and make shopping decisions accordingly. Your company’s cash flow can be improved by keeping an eye on outstanding purchase orders and sales orders.
3. Be aware of stock-wise profits
You will have to monitor your profit margins regularly when you transact business with your vendors. Maintaining future transactions is easier when you know the value of your profit against the sale and purchase price. A stock summary report allows you to view profits made from stock sales according to each single stock item or for each group.
Tips for Inventory Management
Here are seven expert tips for effectively managing your inventory for more profit and better inventory management:
1. Make your inventory a priority
When you organise inventory according to priority, you can determine how often and how much supplies you should order and which items are crucial to your operation but may be more expensive and take longer to arrive. Separating your inventory into three categories is traditionally recommended by experts.
2. Keep track of any product details
Ensure that you keep track of item details regarding products that you are stocking. The SKU numbers, barcodes, vendors, and the country where the product was made, as well as lot numbers, should be listed. Each item’s price might also be tracked over time to keep tabs on factors like supply and demand that may affect the price.
3. Conduct an inventory check
Business owners sometimes include a thorough audit in their annual budget. Others go through their hottest items twice a month, quarterly, or even daily. It is common for people to do all of these things. Whether you physically count your inventory once a month or every few months, do so to ensure that your perceptions match your inventory.
4. Find out how suppliers perform
Your inventory may suffer if you are working with an unreliable supplier. The time has come for you to take action if you have a supplier who regularly fails to deliver or delivers late. Your supplier should be able to help you resolve the issue. You may need to look for new business partners, or you may run out of inventory if your stock levels are uncertain.
5. Don’t forget the 80/20 rule for inventory
It is generally true that the majority of your profits are from a stock sold on time. A major effort should be to manage 20% of stock as 80% of the profit comes from them. You should closely monitor these items throughout their sales life cycle, including the number of units sold in a given period. Do not squander your money on items that don’t make you money.
6. Maintain consistency when receiving inventory
The idea that incoming inventory should be handled properly may seem like common sense, but is there an established system, or do employees receive and process incoming stock in their own way? You may wonder why your numbers don’t line up with your purchase orders at the end of the month or year if there is a slight discrepancy in how new stock is taken in. You need to make sure your staff counts and counts accurately for all parts they receive and that all boxes are opened together, received, and unpacked together.
7. Monitor sales
Adding up sales at the end of the day seems pretty obvious, but it goes well beyond that. The best way to determine the number of items you sold each day is by updating your inventory statement daily. The data will need to be analysed beyond that. Are you aware of which items sell faster and which do not? When does it happen? Does the store sell certain items on a specific day of the week? What items tend to sell together almost always? The key to managing your inventory is to keep track of your sales totals and how each item sells. Managing credit and sales becomes increasingly difficult as an operation grows. Take advantage of sales management tools like OkCredit and OkStaff.
Keeping track of stock summary reports is essential to efficient inventory management. Use a stock summary report to analyse your stocks and implement the tips shown here for better inventory management. The same applies to managing credit and human resources. If you face any difficulties in managing your credit, you can turn to OkCredit for assistance. The most valuable asset to any organisation is its employees, and the OkStaff app provides the best way to help manage them.
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Q. Why do I need inventory management?
Ans. You already know the answer to the question ‘what is an inventory management system’? Now it is time to learn why you need it. The ability to efficiently and quickly manage inventory is essential for organisations today, aside from achieving fast and efficient operations. Management of inventories effectively reduces costs, which, in turn, helps to control accounting and finances.
Q. In the monthly stock summaries, why are closing values different?
Ans. It occurs when additional stock is added from another godown or stock leftover from the previous sale. Quite often, mistakes like these are made.
Q. Listed items in the stock vouchers screen do not match the monthly stock summary. Why is that?
Ans. The net sum of consumption shown per transaction may differ from the derived (and accurate) consumption value at the end of the period due to either accumulation of minor variations or adjustments to entries in prior periods.