Inventory management for manufacturing, wholesale and retail business
999 Items
Shopping Cart
You have no items in your shopping cart.

Why Inventory Accuracy Matters in 2021

Friday, January 08, 2021

Measuring and tracking inventory accurately is essential to a well-oiled operation. Not only do accurate inventory counts reduce the cost of carrying goods, they also help create satisfied customers by ensuring ordered goods are on-hand and properly stocked. Accurate and true inventory data also contributes to visibility, allowing managers to understand data trends and forecast future demand.

In 2017, Wasp Barcode reported that 43 percent of small business do not track their materials or are still using manual inventory management processes. This is a risky practice that cuts into your bottom line and can create significant issues, especially as your business grows.


Some of these risks include:


Lost Business

Inventory records that are updated and accurate can inform you when you need to order new items. If you are under-stocked, you may not have enough products to send to clients. Meanwhile, if you overstock, your warehouse might be overcrowded, leading to disorganization. In some cases, overstocking perishable items can lead to waste.

Failure to properly track inventory could eliminate any earnings your business would have made from this business transaction. Analyzing inventory records over a length of time can help you track trends to predict what items typically sell faster than others.


Lack of Trust from Clients

Lack of organization and accuracy in your store and warehouse setting can create chaos, which may create a snowball effect on client orders. Customers expect a certain level of service when they place an order. If you fail to meet clients' expectations or do not have enough inventory to deliver on an order, your relationship with consumers could be negatively affected. This may cause them to pull future orders with you, lose trust in your capabilities and speak negatively about your business' efficiency with their peers.


Last-Minute Shipping Costs

Warehouses that do not maintain accurate inventories might not be able to deliver products until the deadline is in close sight. When the warehouse staff has to ship products quickly to meet deadlines, they might have to pay for expedited shipping, which can come at steep costs and cut into profits. It is normal for this to happen from time to time as a result of human error, but when it becomes a regular habit, your business could lose significant amounts of money.


If warehouse staff cannot find certain items, they might order more inventory. To meet deadlines, they might pay high last-minute shipping fees to deliver it to the warehouse and then to the client. They might find these misplaced products after sending replacements out to the client. Losing items due to lack of inventory management could result in surplus products in the warehouse. It also means paying for expedited shipping, which they might later find is not necessary after all.


Inaccurate Accounting Reporting

Businesses that do not update their Balance Sheets, Profit and Loss and Cost of Sales reports may fall behind in reporting their financial operations. Having outdated inventory information can allow your business to fall behind on its accounting, which can result in incorrect stock cost values and inaccurate profit reporting.


How to Prevent Inaccurate Inventory Management

Ensuring that your business' inventory is accurate and updated might involve adapting your tracking practices. For a convenient, efficient way to record warehouse inventory, consider mobile data collection technology. Using barcode scanners, tablets and smartphones to track items allows warehouse workers instant access to critical information that transact against your ERP system in real-time.

Inventory Management Blog

25 MarchjInventory - Powerful Veterinary practice management software
As a powerful web-based veterinary software service, jInventory can be accessed anywhere and anytime. All you need is a device connected to internet, such as a computer, laptop or tablet. jInventory is a powerful system for your veterinary practice
25 MarchSome signs it’s time for a software upgrade
In the business world, keeping up to date on the latest technologies or products is key to earning success and maintaining it. If you currently use a server-based software, you probably get periodic updates from your software provider that, when you have the time, you dutifully upload to your computer
25 March5 Sales Reports you should be running in 2021
Starting and running a business involves a 50/50 blend of instinct and fact-based decision-making. And whilst you can rely on your own intuition and the wisdom of others...

Only registered users can leave comments.
Comment title:

Subscribe to our Masters of Inventory newsletter for expert insights

Join over 4000 other businesses getting better at managing their inventory