Inventory Management Best Practices For Small Businesses
Running a small business is tough to do, especially when you’re just starting out. However, one of the easiest ways to run your business into the ground is to fail to track inventory the right away. After all, over ordering isn’t cost effective, and under ordering makes for a bad customer experience.
That’s why you should take a look at these inventory management best practices so your small business can continue to grow and succeed.
1. Use a Reliable POS Company
Built with durability and advanced technology, the right POS company will offer POS systems that can track inventory in a simple and easy to understand way. Track real-time inventory, re-order as needed, and make sure your stay within your budget at all times.
After all, a restaurant POS system isn’t just for collecting payment, tracking employee hours, and generating sales reports.
2. Follow FIFO
FIFO, or first-in, first-out is one of the most common principles of inventory management. This means that your oldest stock (first-in) gets sold first (first-out). This is especially useful for perishable items. Once perishable items go bad, you must get rid of them, which is a waste of money.
Make sure all of your inventory is organized so people know exactly what is supposed to be used first. One good tip is to always have the oldest stock placed at the front of the shelves, with new product being placed at the back.
3. Have a Plan in Place
There are so many things that can affect your inventory levels that you must plan for before they even happen:
- An unexpected spike in sales that results in overselling stock
- A cash shortage so you can’t pay for your product
- Not having enough room in your warehouse or storage area for extra storage
- A slow moving product that may take up too much room
- Miscalculations in inventory purchases that result in over- or under-buying
- A product discontinuation by the manufacturer
4. Routine Audits
No one likes the paperwork that comes with inventory management. But the only way you’re going to know whether your business is thriving or not is to regularly audit your inventory for losses you may not be aware of, overspending, and quality issues.
Don’t perform your audits once a year with your taxes. This will make it harder for you to pinpoint ways to make your business better. Not to mention this once a year auditing will make it harder for you to determine where any discrepancies have occurred.