Inventory management software has become an indispensable tool for many successful business owners who recognise the importance of accurate inventory management. Likewise, accounting software is invaluable for even small businesses, providing key data on business performance.
Even for new business owners, it doesn’t take long to recognise the importance of inventory management software and accounting software alike. The former is essential for accurately managing inventory, and the latter for effectively defining the current standing of your company.
In this article, we examine why integrating both inventory and accounting software is so essential for business owners. In doing so, we can show you how you can maximise the potential of both, by fusing them together.
A delicate balance
As any seasoned inventory manager will know striking the balance between holding too much and too little stock can be a daunting task. If you order an excess amount that exceeds demand, you will have valuable cash tied up in obsolete stock. On the other hand, failing to order enough inventory to meet demand will result in dissatisfied customers.
This is where integrating inventory management software and accounting software will come in handy. By integrating the two, business owners and inventory managers will have more to work with in terms of more accurate analysis and insights into the company’s needs.
Such integration will allow for more accurate information which in turn will lead to improvements in sales forecasts and cashflow. Further, getting this information in real-time will allow for inventory needs to be assessed accurately in line with demand, purchase orders and sales.
Keeping supply chain partners in the loop
For companies with multiple supply chain partners, ensuring they have maximum visibility is key to ensuring productive working relationships. Allowing inventory level visibility to the supply chain partners will help them to manage customer shipments effectively, and the best way to do this is by integrating both inventory management and accounting software.
Aside from its symbolic role – that is, in showing that you trust your suppliers with important information – providing this visibility also has a functional role. Fusing the inventory and accounting software will allow supply chain partners to see your fluctuating inventory levels so that they can proactively ensure you have enough to fulfil customer demand.
Reduced labour, reduced error
Integrating inventory management and accounting software means that many processes usually performed manually can become automated. This reduces the need for an excess number of hands-on-deck, reducing time pressures and the risk of error.
Accurate financial reports
Any successful business owner will understand the importance of regularly creating financial reports in order to identify what is working and what is not. This is a difficult task to do without accurate information about both inventory and accounts, so integrating inventory and accounting software is the best way forward.
By integrating both software systems, business owners, inventory managers and accountants will be able to work more effectively together. More collaboration and communication can mean more effective decisions, and it is these things that make your business superior to competitors.