Spreadsheets and other manual inventory tracking methods have a number of weaknesses when compared with best in class inventory management software. If you are still using spreadsheets to manage your inventory here are ten reasons why you need to stop so that your business can reap the rewards it deserves.
Manual data entry is prone to mistakes
Having to manually input data for each inventory record is practically asking for data entry errors. Studies show that even a proficient data entry staff member makes one error for every 300 characters. Do the maths- if you are assigning 12-digit UPS codes to your inventory, that means an error in approximately 1 out of every 25 manually entered codes. That is a huge inefficiency that simply is costly. The good thing is it does not have to be this way, by having a cloud inventory management system you reduce the risk of human error substantially.
Manual data entry takes time
Having a single spreadsheet limits users’ access. If you have multiple people recoding data in your business’ Excel spreadsheet you will experience bottlenecks as a spreadsheet can only have one staff member editing it at a time. Not only is this again prone to errors but creates inefficiencies due to the time-consuming nature of manually inputting data.
Spreadsheets make it harder to reporting to key stakeholders
Specialised inventory management software typically has specialised functions for reporting to key stakeholders. On the other hand, spreadsheets are error prone and lack specific inventory reporting functions – making effective presentation and dashboards that much harder.
Spreadsheets are less useful to track inventory
Customer satisfaction is increasingly important in inventory based businesses. If you cannot easily locate an item of inventory that a customer has inquired about, you have likely lost that customer to a competitor who can meet their needs more efficiently and effectively. Even if you do have the stock available, manually locating that item wastes much more of a customer’s time compared to an automated system that tells you real-time data of items and their exact location.
Reordering and forecasting errors are common
Manually using spreadsheets to input data is prone to error, undermining the forecasting and reordering accuract. Inaccurate forecasts can leave a business with insufficient inventory in stock come peak demand, while excess reordering can see a business’ inventory build up past sustainable levels. Excess inventory incurs holding costs and creates a limitation on cashflow that could be better used elsewhere.
Spreadsheets are a poor way to identify trends
Effectively managing inventory requires you to know how much of a certain item you need on-hand during different seasons. The ability to forecast inventory is integral to meeting your customers’ demands resulting in greater customer satisfaction for your overall health of your business. Many spreadsheets are not set up with historical analysis in mind. While Excel has strong time-series analysis tools, these require solid historical data and a good knowledge of data analysis. On the other hand, specialised inventory software will typically record inventory data in a series, and will usually include a range of reporting and analysis tools, making it easier to identify trends.
Excel misses out on opportunities and strengths
Because Excel is not using real time data, the accuracy with which you can pin point opportunities, such as decreasing costs or strengths such as higher selling items is diminished. You risk losing out on some great options to take advantage of. Moreover, it is much harder to identify threats and weaknesses without access to real time data.
Spreadsheets are obsolete
Let’s face it – spreadsheets are getting obsolete. Furthermore, you need to update software often yearly which its true value does not reflect its overall cost. Do not fall behind, get a cloud-based inventory management system so your business gains a competitive advantage.
Create efficiency and automate
If you are still using Excel spreadsheets chances are a lot of your other processes are manual and time intensive. Get automated, it is a sanity saver and it gets you the results you need without compromising the human touch. Imagine less time using manual labouring systems, freeing up staff to get on with other projects. This creates efficiency in the workplace, a significant morale boost and a huge cost saver.
Excel has poor integration support
You cannot easily link up Excel with multiple software tools for accounting. Constantly downloading and importing data is time consuming. Create efficiency now by having a cloud inventory management system which integrates with your accounting, POS and e-commerce software.