Inventory management software is a must for a business of any size and so is accounting software to improve efficiencies and organise businesses smartly. Accounting software defines the current standing of your company while inventory management software is used to maintain inventory health. Inventory management is about knowing what you have in your warehouse and where your stock is located. However, unless it’s integrated with your back-office systems, an inventory management system alone can’t effectively optimise your inventory, nor ensure the inventory asset value on your financial reports matches what is physically in stock — at least not without manual arduous intervention and reconciliation.
These two entirely different components of your business can be incorporated for better management that gives your business a competitive edge, while minimising risk, saving money and automating the processes. Let’s take a look at the top four benefits of integrating your inventory management and accounting software.
Prevent stockouts and wastage
Optimising inventory stock helps maintain customer satisfaction and avoid wastage. Storage and handling costs are associated with every inventory item stored. So collecting excess inventory stock will lead to unsold items sitting on shelves, which is a cost in itself and even more so if items become damaged or obsolete. However, on the other hand, having a shortage of items will lead to missed sales opportunities and disappointed customers.
Having an integrated inventory management and accounting software solution can increase the accuracy of data analysis and provide valuable insights such as sales forecasts and cash flow. Solutions that have real-time visibility will benefit businesses to plan out more accurate levels of inventory stock required for demand.
Reduce labour expenses
A significant part of a businesses expenditure is spent on labour costs. When integrating inventory management and accounting software the chances of unnecessary labour intensive manual feeding of components that relate to each other are reduced – saving time and money.
Compiling accurate financial reports
Every business needs to check inventory stock with accounting data to avoid discrepancies. Accuracy is important for key stakeholders and investors, not only accurate financial statements for tax purposes. If there are continual major discrepancies, then root causes should be investigated. Integrating the transactions of your inventory management system with the back-office accounting system will help to remove complications, mistakes and delays.
Integrating two of the most vital software of your business into one platform streamlines processes and with real-time solutions the data available increases automation in the business. The important decisions can be based on the output from the integrated software, uncovering potentially valuable insights for inventory management decisions and also allows for efficient and accurate financial reports that can be obtained effectively through the integration.
Determining the right inventory management system for your business and a strategy for back-office integration requires assessing your needs today and your plans for future growth. To achieve maximum benefits, integrating inventory management and accounting software solutions should be real-time, flexible, transparent to users, reconcilable and scalable.