The Pitfalls of Excel for Inventory Management

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Excel is a great program that is useful for many things. However, this does not include inventory management. Unfortunately, as strong as the temptation is to simply use the familiar to manage your inventory, it will let you down in the long run. An inventory management software package such as Unleashed Software is the best way forward, particularly if your business is growing from strength to strength. Here are a few pitfalls of using Excel for inventory management.


Using an Excel spreadsheet to manage your inventory is certainly a lot more time consuming than using a custom inventory package. The reason for this is that Excel requires the manual entering of data. For this to happen it requires a manual count which means every time you are wanting to update your inventory, you will need to do a thorough, physical stock count. Custom-designed inventory packages have barcode-scanning capabilities and can automatically enter counts making them not only a lot more time efficient, but also more accurate.


Only one person can use Excel spreadsheets at a time, which either renders them an incredibly limiting way of doing business or people may try to combat this by having multiple versions leading to confusion and inaccuracy. On the other hand, inventory management software can be accessed by anyone anywhere, which allows for multiple access points in the one site but also lends itself to being accessed remotely if you were to say, travel on business.

Keeping things current

Unfortunately, as beautifully simple as Excel can sometimes be for storing data, it fails miserably at competing with specialized inventory management software for real-time data counts. Excel requires manual counts and manual entering, which means it is impossible to keep up-to-date, accurate data all the time. Inventory management software not only allows people to enter data from multiple locations to the one file (for example when things are shipped) but it can incorporate routine motions such as scanning an item at the till during a sale into the data file so that all stocks are updated. This could also be used for products in different stages throughout manufacture allowing you to also monitor processing times and raw materials. Inventory management software has the ability to produce accurate stock counts and locations at any given point, which is something Excel is lacking.


Excel compromises accuracy for large companies. Not only is it easier to make an error when you are counting stock rather than scanning barcodes, but also because there could well be several versions of the same file open and being entered into meaning real-time, accurate counts are virtually impossible to attain, especially as the company grows. The other point to consider is that human error will always occur. By reducing the number of stock counts or numbers entered into cells, the opportunity for error is minimized. With accurate stock counts at any given point, inventory management software makes it easy to formulate decisions based on stock levels, for example to re-order if something is selling incredibly quickly.


If errors are made in an Excel spreadsheet, it is incredibly hard to trace and correct them. This is not necessarily just to pinpoint the culprit and further educate them in the art of double-checking but rather to actually correct data that will be relied upon for decision-making. With inventory management software it is very easy to track any changes that are done and therefore to identify any potential errors quickly before inaccurate decisions are made.

Inventory Management Software solutions

Excel is fantastic for storing and manipulating data but as soon as the company grows resulting in data entry from multiple locations, it really is time to look at inventory management software. It will not only free-up time and effort but the overall effect is increased accuracy, transparency and reliability, which can only be beneficial as the company thrives.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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