For a small business, using a spreadsheet is a simple, cost-effective solution to managing your inventory, right? Well, maybe, but maybe not. In the early days of a small business, a spreadsheet is an easy way to reduce upfront costs and still manage your inventory. Perhaps your company only has a few suppliers or products to manage. Maybe you don’t have the capital to invest in inventory software in the early days. However, using spreadsheets for inventory may be holding you back.
Let’s take a look at what some businesses think they’re getting from using a spreadsheet versus the reality of working with spreadsheets for inventory.
In theory, when you use a spreadsheet to keep track of your stocktake, you should be able to manage the data and have a good idea of what’s going on in your warehouse. However, in reality, when you start tracking a large amount of inventory, you end up with data entry errors. These errors add up and can skew your stocktake totals. When you move from managing small amounts of inventory to large quantities, the chance for error increases even more. Your staff will have to do a series of checks to ensure the stocktake is actually correct. This uses valuable employee time and spends company money on unnecessary work. In this instance, the extra money spent on wages would be better spent on an investment in cloud-based inventory software.
Keeping your inventory all in one place
With a spreadsheet it should have everything saved in one place, right? Yes, until someone else needs to access the spreadsheet and opens up a read-only copy and saves another version of it with new information. There is no doubt that multiple people will be handling the inventory. This means multiple people will need access to the spreadsheet. However, version control can become a real problem when multiple people are accessing it and numerous copies get saved. It gets worse if they start saving it in different locations! The probability for making mistakes while entering the stocktake increases as well.
Staying up to date
With a spreadsheet, you think you’re staying up to date with your inventory count. You can save it daily or several times a day and it has a timestamp with the last time the spreadsheet was accessed. But the inventory count is only as accurate as the time when the inventory was counted before the last saved version. This means the numbers could be totally different when the document is accessed for review. There is no real-time capability like there is with cloud-based inventory software.
If your company gets to the point where it is managing multiple warehouses, then it cannot afford to go without real-time inventory tracking. The opportunity cost far outweighs the cost of investing in cloud-based inventory software. You will lose efficiencies and complications will build across locations if the inventory is tracked with an antiquated and inaccurate spreadsheet.