Considerations for controlling inventory to improve your business

Jul 23rd 2015 at 11:58 PM

If you have a retail business, one of the difficult things that you will have to do and balance between is how much stock to have at any one moment in time, as well as putting in place a system to manage the tracking of the stock from the supplier up to the point where you manage to sell it to your customers. You never want to have too much stock so that your finite cash resource is tied to goods that you will not sell immediately, but at the same time you never want to be understocked so that your customers are not able to get the goods that they want, when they want them. Whether you need to decide on when you need to order, what you need to order and how much, how you can handle excess and shortage of stock, tracking the inflow and outflow of the stock including the exact number of goods you have at any particular moment, and other general stock management exercises, you will need a system that can allow you to easily manage all these processes.

There are several ways you can manage and control your inventory in order to improve your business and make it more efficient and effective. Some techniques that you choose from will be simple and others will be complex, depending on the size and complexity of your business, as well as the complexity of the different types of product variations that you have to sell. When you receive payments on goods you will also need to keep track of the cash deposits and withdrawals to avoid any confusion. You can decide to deposit cash receipts every day or after a few days, and you can decide to make withdrawals weekly or even monthly. More often than not, you will not or should not make withdrawals through the bank ATM, but if you do, you will need to be very diligent at collecting bank withdrawal slips from the ATM.

In order to manage your inventory, you will need to determine the best method to track the inventory in your business. Some of the techniques that will be available to you include a visual control, a tickler control system, click sheets and a stub control system. Depending on the nature of your business, you will find that a point of sale system and machine will be quite invaluable to you. If your business is mobile, you may also need a mobile POS to keep track of transactions and inventory, while you are away from your domicile or main office. You could also hire an external inventory management agency to handle all the inventory related issues if you think that all the tracking of the inventory will distract you from fulfilling your main objective of availing stock to your customers. Finally, having a buffer of stock or inventory so that you can get access to some emergency stock, in case you need it, is a good plan to have in place with the manufacturer or producer of your goods for sale.

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