The ultimate guide to choosing the right inventory management software
Inventory Management System in Nigeria
Inventory management is crucial for businesses of all sizes. Getting it right is one of the most important things you can do to increase your profits, while getting it wrong can spell major financial loss or even complete business failure.
We detailed the importance of inventory management in last week’s article, Inventory Management 101, so please check it out if you want info on all of the basics. This week we’ll be discussing inventory management software and how to choose the best fit for your business.
Why use inventory management software?
Besides the fact that software makes inventory management much easier and saves huge amounts of time, the manual way (also known as an Excel spreadsheet) is not a great idea for a few key reasons:
- Spreadsheets can grow and get out of hand very fast
- It leaves too much room for human error and incorrect data entry
- Inventory is not updated on a real-time basis
- Documents are typically stored locally and data can be at risk of loss or corruption
- It’s difficult to analyse your sales results and inventory levels
- Spreadsheets can’t always be imported seamlessly into existing accounting or POS software
- This method is not scalable and won’t be able to keep up with the growth of your business
The two methods that do work with inventory management software are barcodes and radio-frequency identification (RFID). We recommend that you choose one of these methods for managing your inventory.
Features to look for in your inventory management software
We’re going to cover a pretty long list here, so it’s important to keep in mind that not all of these features will be required for your type of business – you should mark down the ones that you definitely need, as well as the ones you may need in future and forget about irrelevant features.
It’s also worth noting that your point-of-sale software may have all the inventory management functionality you need already built in, so just make sure you’re not doubling up on your software.
Super important features
- Central hub: Ensure your software will act as a ‘central hub’ between all purchase points, including online stores and multiple physical locations.
- Real-time data: This is especially important if you’re running multiple stores or manage multiple warehouses.
- Usability: You should trial all software for free and make sure your employees are comfortable using it before buying. This can save a lot of time and money in the long run.
- Security: Your data should be backed up online in the cloud and not stored locally.
- Technical support and training: You should ask your provider if implementation, support, and training are included. This can be a big extra cost if it’s not.
- Hardware Integration: Will the software work with your existing computer, operating system and barcode/RFID scanners?
- Create purchase orders: Automated purchase orders that can be emailed straight to the relevant supplier save a great deal of admin time.
- Customised alerts: It’s helpful to be able to set up alerts when a certain item is low in stock. This is also quite important for stores selling perishable goods, as you can set up alerts for expiration dates.
- Inventory planning and forecasting: Your software should be able to predict when stock will need replenishing after collating a certain amount of historical data.
Reporting and data
- Customisable reports: This is important if you want to gather data that isn’t part of the standard built in reporting options.
- Import data into existing software: Make sure you will be able to import data from your inventory management software to any other software that you report from, e.g. your accounting software.
- Import historical data: Ensure that you’ll be able to import your historical data from previous software or spreadsheets into your new software.
- Track by preferred method: Most businesses will have a preferred method for tracking and sorting inventory. It’s best to check if your software will allow you to track inventory by a number system (such as serial number or SKU), location, date, pallet, or product category, depending on what your business uses.
- Return management: A function for managing inventory that has been returned is important for most retailers.
- Track business supplies: This feature tracks business supplies that aren’t products or stock that will be sold on to customers. For example, stationary, computers, furniture, etc.
- Kitting: Kitting allows for assembly items or raw materials that will become a finished product to be bundled together.
- Track transferred stock across multiple locations: Ensure that you can track any inventory that has been transferred in large numbers to another one of your locations.
- Customer database: Having your software manage your customer database for you is super convenient.
- Customise paperwork: This is more of a ‘nice to have’. Many software options allow you to easily add logos and other design features to paperwork such as purchase orders, invoices, and other reports.
- Multi-currency capability: Working in more than one currency can cause a lot of admin headaches. If you buy and/or sell in various currencies, ensure that your software can convert them all to your base currency for reporting.
- Print labels: Ensure that you’ll be able to print labels such as packing slips, barcodes, or shipping information if you need them.
- Customised input: Some software options offer the ability to easily customise forms, which means you’ll only have to enter fields that are relevant.
- Unlimited users: If you want a large number of employees to have access to your inventory management data, it’s best to make sure that the software does not cap the number of users.
- Delegation: A handy feature for some is the option to delegate certain inventory areas or items to specific users or members of staff.
Do you have any other features to add to the list? Let us know in the comments section!