Over time, inventory software and inventory management systems have steadily become more popular amongst businesses that deal with inventory. According to a small business survey conducted by Wasp Barcode, 53% of small businesses use any kind of system to track their inventory. In order to keep up with the demand, there are now many inventory software options available that are each designed to answer different business needs.
Regardless of whether it’s your first time purchasing or you’re looking for an upgrade from your current system, it’s essential that you find a system that fits your specific business requirements. There are systems out there that suit your unique business, but if you’re picking randomly, you’re more likely to find a system that isn’t the right fit. Using a poorly chosen system will not help you reach your full potential, and could end up being a waste of money.
In this guide, we will be walking you through a list of questions that you can ask yourself to help you find the perfect inventory software for your business.
What are your inventory management goals?
Assess your business to see if there are any specific inventory management goals or targets that you would like to achieve, or specific problems that you want to solve with your system. For instance, are you looking for a system that can improve your inventory accuracy rate or reduce your inventory holding expenses? Would you like more streamlined workflows or better scalability? Making a note of improvements that you’d like to see compared to your current system can help you find a system that will target those goals specifically.
What type of products do you work with?
Inventory refers to the raw materials, finished goods, and unfinished goods that a business stores. The type of products that a business deals with, the materials required, and the variety of each product all impact the amount of inventory that the business will own. This in turn plays a big role in how advanced their inventory management system will have to be in order to keep up.
For example, a business that manufactures electronic devices would have a large number of unique parts for each product. Businesses that work with clothing, on the other hand, would have to deal with many different variations of the same product, like colors and sizes. Both businesses will have a large quantity of inventory data, which can be managed with a simple system like a spreadsheet, but that will introduce chances for error. An advanced inventory management system can handle the amount of data that comes with these types of inventory much better.
In short, businesses that deal with a few basic types of items require a less advanced system, whereas businesses that deal with more types or variations require a more advanced system.
How many orders do you receive?
During the holidays or other peak seasons, businesses begin to receive more orders than usual and rely even more heavily on their inventory management systems. If your system isn’t well matched to the volume of orders you handle, this is also the time when it can let you down. This can mean messy errors, lost data, confused employees or customers, and so on.
Both during and outside of peak seasons, the number of orders that you receive also contributes to the complexity of your potential inventory software. Regardless of how big or small the number is, you want to make sure that your system is capable of managing, fulfilling, and keeping track of all of your incoming orders as efficiently as possible. A lot of systems offer several pricing plans, each meant for a different number of orders. Look for the plan that matches your business’s sales volume the best.
What sales channels do you use?
If your business is into multi-channel or omni-channel retailing, then the sales channels that you use are another important factor to consider while looking for inventory management system. You’ll want a system that is integrated with the sales channels that you use, so that accurate data from your system is synced in real time with your channels and every platform is on the same page. This will help you avoid problems caused by missing or incorrect inventory information, and can even give you better visibility on how well your business is doing across all the different channels.
What are your reporting needs?
In order to improve your business processes, you’ll first need to know your business’s performance, and for this you’ll need to review reports. Different businesses have different reporting requirements, but the most common in terms of inventory include reports on sales, purchases and expenses, payables and payments received, and inventory activity. If you know which reports you need, you can pick a that offers them.
What is your budget?
You have a lot of choices for the cost of your inventory management system, depending on the features you’re getting, how advanced the system is, and the size of your business. With all the options available today, you can find systems that have prices ranging from absolutely free to thousands of dollars a month. So start by setting yourself an appropriate budget after considering factors like your business’s size and your plans for growth.
Do you need a system that is compatible with your other systems?
By the time you begin looking for an inventory management system, it’s likely that you would already be using other systems that would have been necessary from an earlier time, such as accounting, shipping, logistics, and order management software. If you are already using systems for these other processes, then another criteria that you should look for in your inventory management system is if it will be compatible with your existing solutions. This way you will be able to sync all of your data without much manual intervention, and tie together your processes. For instance, with accounting software you could sync information about your payments and receivables, so that you won’t have to enter this data again.
An inventory management system is an investment for your business, so it’s important that you use the right one so that your inventory management processes operate as efficiently as possible. But finding the right system is sometimes easier said than done, since inventory management systems aren’t usually designed with one type of business in mind. These questions should give you a fair idea of what kind of requirements your system should be able to provide based on your goals, products, orders, sales channels, and more!