Five reasons to have proper inventory system

Although you can always sell the excess stock to inventory liquidators, it is imperative to have a good inventory system in your business. Having the right amount of items in your stock lets you plan your sales the right way and improves the cash flow.

When you have too much of an item, it not only eats into your profits and takes you prime shelf spaces but also ties up your capital. A business turns a profit by making sure that all times in stock move as quickly as possible. The high the turnover rate the higher the profitability.

Slow moving stock only serves to hold your money and reduce your profit margins. For instance, if you buy goods worth $1000 every month and make a profit of $200, over a year you make $2400 in profits. However, if the stock does not move for six months, your profit dips by half.

Here are some more reasons when you need to have proper stock inventory systems.

Improves accuracy of orders

A good management system keeps track of all the item in your stores or warehouses letting you order only what you need at a particular time. In addition to that, it also enables you to order items in the right amount hence reduce the chances of overstocking.

With a sound system, you can eliminate perennial shortages that serve to drive away the customers.

It helps you organize your warehouse better

It is highly impossible to keep track of the items you have in stock if the organization of your store falls short of efficient. It becomes hard to track some of the items, and you may have to reorder some items given that you cannot trace them in the store. As such, some goods are likely to reach their expiry dates without ever hitting the shelf. Grouping items into respective categories make it easier to access them and prevents contamination as well. It also helps to fill up order quickly, much to the delight of your customers.

It saves you money and time 

Not having to do a recount of the items, you have in store save not only you time but also the effort. Your staff members can apply that energy to doing things that are more meaningful and benefits the company. As such, they never have to work overtime just to meet the daily needs of the business. When workers do not put in overtime rates, you get to make a saving. Regarding the stock, you never order too much of the same thing and can freeze orders on slow moving items until you clear them from the shelves.
It keeps your customers happy

Business exists to serve the needs of the clients, and if you excel at meeting their expectations, you are assured of good flow of business. Keeping your customers happy narrows down to having the right items in stock and ensuring that you never have a runout.