Without keeping an accurate record of your company’s inventory, you risk dissatisfying your customers and ultimately, losing profit. Below, we summarize precisely why keeping accurate inventory records is crucial for the success of your business.
An accurate inventory record first and foremost means that you are more likely to be able to fulfil client orders satisfactorily. If you know exactly what stock you have, where, and how much you may need to order, customers can trust that you will deliver their orders efficiently. An accurate inventory record helps to ensure that you always have high-demand items on-hand, so that you never come up short.
An accurate inventory record also allows you to follow sales trends, so that you can differentiate between fast-moving and slow-moving products. This allows you to proactively predict and prepare for increases in demand, so that you can ensure your most popular items are fully stocked. This will prevent supply shortages, which can frustrate customers and tarnish your company’s reputation.
An accurate inventory record means that if customers call or write with specific inventory-related questions, you can answer their queries accurately and honestly. A faster response time gives customers a much better impression of your company, increasing the likelihood that they will return. The ability to give customers accurate inventory-related information also translates into financial gain for your company, because the faster these types of queries can be answered, the faster orders can be put through.
Inventory Records Reduce Losses
An inaccurate inventory record will put you at risk of coming up short when orders come through. Aside from the frustration this causes for the customer, it may also mean that your company will have to spend extra for faster shipping. Even for smaller businesses, this extra cost adds up over time, and the financial loss for larger organizations is significant. By keeping an accurate inventory record you avoid these costly mistakes.
Similarly, inaccurate inventory levels may lead to over-ordering of stock, which can be costly if you cannot sell the surplus inventory to offset your expenditure. Inaccurate records may also lead to under-ordering of stock, because this can inhibit your capacity to predict increased demand in the future. Obviously, this prevents you from providing high-demand items, leading to a reduction in profit overall. Keeping accurate inventory records will prevent this situation from occurring.
By maintaining proper inventory records, you will be able to see where staff are making progress and where they might need some improvement. This will allow you to provide incentives for improvements in certain areas, and also creates room for disciplinary action where necessary. This functions to improve morale, which can translate into better productivity and less opportunity for conflict in the workplace.
Similarly, keeping an accurate inventory record may allow your staff to devote more time to other areas. Working with inaccurate records can be time-consuming, but accurate records means your staff can work on improving certain aspects of the status-quo inventory process to improve productivity and efficiency in new ways.