Inventory Management for Small Business You Need To Know
As a small business owner, you have certainly put some thought into inventory management for small business, specifically your business. If you haven’t, then you definitely need to start.
This is how you and your company manage your inventory, orders and so much more. That being said, it is something you take time to ponder and rethink to ensure you are using the best methods that are available to you at the time.
Why is it Important?
I know as a business owner, you understand it is important, but why? This process helps you answer questions that you may not be able to otherwise. It helps you make decisions in your business that helps your business to grow.
● Should I order that popular item now?
● Do I have enough inventory available?
● Are the more expensive items slowing down my cash flow?
● Is damage or theft affecting my losses?
● Am I overpricing any products?
These are all questions you will answer by practicing good inventory management for small business. This helps to solve issues of bad pricing, overselling, overstocking, and more. If you aren’t utilizing organization tracking, you are blinding yourself to a big problem.
Just because you are a small business, doesn’t mean you should keep track of your inventory on paper or a spreadsheet.
You are wasting time and you are more likely to frustrate yourself if you handle it in this manner. Your business will outgrow this method as you expand, so why not start out saving yourself time? Your business is online, it’s in person, and maybe even at trade shows; tracking all that can be a real hassle. So using software that is available will make this an easier process for you.
These systems will automatically update when you sell online to multiple stores, and will reduce the inventory to all for you. This is also a way to keep all your data in one place and receive reports that will help you to make decisions. This also is easier to get the information to your accountant. All of this is done with a few clicks of your mouse.
You file your taxes, so I am sure you know what COGS, or the cost of goods sold, is.
Knowing this opens up a wide variety of benefits to your business that you may not be aware of.
It helps to:
● See the comparison for pricing and your spending per unit.
● Lowers your tax burden, plus it helps you plan your future expenditures as you sit with your accountant.
Generally, you will only calculate your COGS at tax time, but if you look at the benefits above, it may be worth it to track this all year. Just don’t try to do it the old fashioned way, with pen and paper. There is technology, as I mentioned above, to save you the time, and headache now.
Summing This Up
This is a topic that most small business owners dread as it can be a daunting task. That might be true, but with the information you receive from completing inventory management for small business, it is always worth it. It may be easy to do your inventory by hand now, but it does take time. Instead, you have the opportunity to grow your business by utilizing all the benefits of a software.