Time is at a premium in a growing business, so it pays to operate as efficiently as possible. This extends to inventory management, which can often absorb inordinate amounts of time. Barcodes are an easy way to improve your inventory management function; they improve the accuracy of your inventory records, allow for real-time updates and, crucially, make the data entry process as simple as possible.
What Does Barcoding Involve?
At its most simple, a barcode is a picture that represents a string of numbers and letters. In a typical ‘one dimensional’ barcode, numbers and letters are represented by stripes. Two dimensional barcodes, on the other hand, use a complex algorithm to represent a larger amount of information, typically in a square or circular space.
Although larger businesses often have elaborate inventory tracking systems, including embedded barcode scanners, setting up barcoding only need involve a minimal investment in new technology. You will need a barcode scanner and, ideally, a label printer. Barcodes can be instantly generated for internal use, although if you intend to barcode products for sale to other retailers, it may be prudent to use an accredited barcode from a standardized supplier such as GS1. Once you have generated barcodes for each stock keeping unit (SKU), you can then use them on existing product labelling or produce new barcode labels.
Using Barcodes with Inventory Management Software
Barcode support is a common (but not universal) feature in inventory management software. When you scan a barcode, inventory management software should match the information from the barcode to a specific product or item of inventory within your business’ inventory database.
How Barcoding Simplifies Small Business
The key benefit of using barcodes within a small business (or, in fact, any business) is time savings. Business owners and key staff often spend a lot of time entering SKUs into inventory management and accounting systems, in many cases to the detriment of more productive business functions.
Barcodes also reduce the frequency of errors within the inventory record. As mistakes made when recording inventory information can contribute to missed sales, excess inventory or even inventory shortages, making fewer mistakes will have a direct impact on your business’ profitability and capacity to grow.
Without barcoding, it is much more difficult to operate a real-time inventory management system. A real-time inventory management system enables you to manage your business’ entire supply chain from raw material ordering to distribution. Real-time inventory control also records and allocates costs at every stage, simplifying accounting and tax reporting.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. When not writing about inventory management, you can find her eating her way through Auckland.
In a small business, real-time inventory control is an essential business continuity tool. For example, without barcoding, if the staff member who processes inventory movements is backlogged, on leave or unavailable, there is a risk that the inventory record will not keep up with inventory levels in the warehouse.
Barcoding can also contribute to a small business’ risk management strategy. For example, small food and beverage manufacturers are subject to the same food safety rules but have a lot less resourcing in the event that something goes wrong. Barcoding improves the accuracy of inventory records and can also be used to ensure traceability from raw materials to each batch of finished product. In the event of a recall or food safety issue, the use of barcodes can significantly reduce the administrative burden.Topics: barcode, barcode scanning, inventory management, inventory management software, small business, SMEs