The correct maintenance of inventory control is essential to any business as it is one of the main indicators as to how well or bad the business is doing. Good inventory control means correctly recording all incoming merchandise to the business, identifying the location of all that merchandise at all times until it finally leaves the business either incorporated into something else or as a sale. What happens to that merchandise and how it leaves the inventory must of course also be recoded and kept as part of the business’s records. When it comes to evaluating the worth of a business, a lot of that worth will depend on just how much inventory the business has as inventory is considered as an asset, something that has been paid for and will be sold but hasn’t yet been.
Many times a business may consider that being down in physical inventory items is the worst thing that can happen but sometimes being up can be even more disturbing. When items are missing, there are several reasons as to why they could be missing and often it is due to staff pilfering and although this is bad, at least the extent of the loss to the company can be estimated. If however the stocks are up, that indicates another sort of problem. For stocks to be up either there is bad information being registered in the inventory or the inventory is not being managed correctly and in either case it means that there is no way of telling if stocks are really up or down and by how much.
As human error is prevalent and a fact that is inevitable, it is therefore best to have an automated inventory system and today there are many computer inventory software packages that can provide just that. Not only can a modern software program manage stock levels and keep track of the locations for that stock but they can also monitor stock by serial numbers or part numbers if required. The software can automatically order replenishments of certain stock when needed and accurately monitor the time stock left the inventory and where it went. Once these software programs have been installed they need the minimum of human entered data to maintain accurate stock reporting and can deliver any required reports regarding stock in several different formats including graphs. Although the software may not be able to recognize anomalies, careful study of the reports they can provide will make any anomalies easily spotted.
Manually maintaining an inventory is a very labour intensive operation, especially if serial numbers and sell by dates are also to be monitored and so a software package, as it only has an initial cost to buy and install, is financially beneficial to a business. As the program immediately updates all records, a software program is also faster and so therefore more efficient than a manual system. What most managers like best about a software program though is the speed with which they can have reports presented.