Small Business Owner? How to Manage Inventory
Anyone running a small business invariably determines they must have some type of system to manage their inventory.
Of course, it’s not uncommon when first starting out to use a “bare bones” method. However, over time these basic methods become unwieldy and perhaps even fiscally dangerous. In this post, we will outline three methods of keeping track of inventory. As a business grows, hopefully owners will find themselves working up the ladder from the most informal to the more sophisticated methods of inventory tracking.
We’re hoping that most small business owners are at least using spreadsheets, such as Microsoft’s Excel to manage their inventory. For anyone using less, such as a paper notebook “system”, the risk for potential disaster is high. A paper notebook can easily be lost, have pages ripped out, and is perhaps full of hastily scribbled “documentation” that no one, perhaps not even the original writer can decipher.
Spreadsheets are definitely a step up from an inventory notebook, but there are still potential risks to this informal method as well. Spreadsheets such as Excel do not necessarily provide an audit trail, so no one can ever be 100% certain of an accurate inventory level. In addition, spreadsheets are typically tied to the employee who created them, so their replacement may have a fair amount of difficulty determining how the spreadsheet inventory system is supposed to work.
There’s an App for That
Yes, just as there are apps for everything else under the sun, there are apps that help small business owners manage their inventory. There are a number of low cost, even free apps, that will help a SBO with tasks such as item creation, quantity changes, item scanning, etc. As a company continues to grow and needs more advanced options such as tax calculations, along with purchase and sales orders, there are apps who can handle these more advanced inventory management tasks as well.
A desktop IMS (inventory management system) is another route for those who are transitioning from a small to a medium-sized business environment. Fishbowl is one such inventory system. It is particularly useful for those needing warehouse management and manufacturing tracking features. It easily integrates with SMB accounting software such as QuickBooks. Between both the inventory and the accounting software, most (larger) small businesses find these software packages fulfill their needs.