If you run a small business – or if you used to run one and your business has gotten bigger – you’re probably familiar with Excel. This versatile little piece of software is great for budgeting, accounting, scheduling, project management, customer relationship management and more.
In particular, Excel can be a really handy tool for inventory control and management when you’re just starting out. Whether you’re operating out of a garage or a small retail shopfront, Excel is great for small businesses with small staff, small inventories and a small customer bases.
At this point in your business’ life, it can seem counter-intuitive to spend what feels like a large amount of money on a specialist online inventory management software – and sometimes it is! Sometimes your business just isn’t big enough for you to justifying absorbing that cost, and that’s fine.
But if your business starts growing (and that’s really the goal, right?) then it should quickly become obvious that Excel isn’t made to scale and grow with you. What kind of problems might Excel create for your inventory control as your business grows?
Data entry errors
The larger your inventory grows, the more likely you are to experience data entry errors. It’s tough enough to keep track of small volumes of inventory, but with larger volumes of product flowing in and out of your business premises it becomes more difficult to keep track of the correct numbers of what’s come in, what’s gone out and what’s still to arrive – and it also becomes more difficult to find the time to double-check those numbers and catch any errors. The end result is that you might end up recording incorrect figures in your Excel spreadsheet, and those incorrect figures might stick around for days, weeks, months or even years.
Shortages and overages
When you’ve got incorrect figures recorded in your inventory software it’s difficult to accurately forecast how much stock you need to order and how often you need to order it. You might end up ordering too much of a certain product and be forced to sell it at a discount to reduce your inventory, reducing your profits in the process. You might also order too little of a certain product, resulting in shortages and forcing your customers to look elsewhere for the product.
Confusion in the office
Unlike a lot of online inventory management solutions that use the cloud to sync across a range of different devices, Excel spreadsheets have to be saved locally and distributed. As your business grows, more people will need to be able to access and alter your inventory management data. This can get difficult to keep track of, especially if you haven’t set up clear chains of command for communicating and entering inventory data. It could even result in you using out of date inventory data as the basis for all your future orders!
Confusion across offices
Take all of these problems, and imagine how much bigger those problems would become if you were using one Excel file to manage inventories across two or more warehouses — the stress would get unbearable!
There will always come a point in a business’ growth where Excel becomes inefficient, confusing, unreliable, more trouble than it’s worth. At that point, your best bet is to move on to a cloud-based online inventory management solution. These software solutions can sync up across different devices, making it easier to keep your employees up to date with what’s happening with your inventory. They create certainty and make it easier to catch unforced errors, and often come with lots of other features and perks that can streamline your business further, like:
- Intelligence reports on your inventory data;
- Business-to-business eCommerce;
- CRM management; and
- The ability to sync across other platforms and software solutions.
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.