When managing your inventory, you are always looking for ways to optimise and improve your operations. Trying to keep healthy levels of inventory without overstocking or understocking is a difficult practice that most inventory businesses experience. Having inventory stock go in either direction can be a costly exercise. This can lead to greater problems within your business.
Big and small businesses both face this challenge. However, smaller businesses or those without as many resources may struggle without the high-tech tools that often guide big companies on their inventory stock levels. Often, businesses will make large purchases when the price is good, but that doesn’t necessarily mean it was a good deal. If you can’t sell off that inventory stock, then was it really worth getting the bargain?
There are some helpful reports that can alter your approach to inventory management. Sales reports and inventory management reports can provide your business with data that can guide future decisions. With this information readily available, you’ll be able to manage your inventory better.
Why should your business generate sales reports?
A daily sales report is key to showing you what’s being sold and when. Sales reports can look at a variety of different timeframes so you can gauge what goods are actually selling. They can generate a report showing what sold today, in the last week, month, quarter or year. This creates a useful platform for identifying sales trends. Unfortunately, some of this data is often displayed too narrowly. This means that the snapshot of sales is only for specific windows of time. Make sure you broaden your parameters and look at plenty of different timeframes and locations when generating this report.
For instance, you can look at sales reports by region or country-wide. Perhaps snowboards sell better in regions where the mountains are a drivable distance. Your business can use these sales reports to target your future customers and make smarter purchasing decisions.
Sales reports can also identify the average order amount, the type of shipping the customer used and the top payment types used. You can see trends and what is popular with customers. Sales reports provide an insightful depiction of what customers are doing. Use this information to support inventory stock purchases and how you cater to your customers.
Why do inventory management reports help sales reports?
Inventory management reports can help guide what you should stock on shelves. This can be backed up by sales reports. For instance, you may have some low-cost items that take up a bunch of space on your inventory warehouse shelves. However, they don’t make you that much money. If you check an inventory ranking report, it will rank your products in order by the amount of gross margin created over the last year. It will show you how much profit you made from them versus how much it cost to store the product.
Look at inventory management reports alongside sales reports. If sales reports show which items are popular and inventory management reports can show which ones cost the least to have in storage, look to combine this information and make better business decisions on what you should stock and sell.
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.