Inventory Management Software
Making the step up to inventory management software is a monumental moment for your product business.
Cloud-based solutions provide the most sophisticated technology — at the most affordable price point. However, some will benefit from cloud-based inventory management software more than others. Follow this section of our inventory management guide to identify whether you need an upgrade now.
In this guide:
What is cloud inventory management software?
Cloud inventory management software is a type of inventory system that utilises the power of cloud computing. It differs from other solutions in two ways:
- It’s designed specifically for the task of managing products and operations (unlike, for instance, the inventory module in an accounting solution)
- It’s hosted online. So you can access it from any computer (unlike Excel) and you won’t have to install anything (unlike, say, many ERP systems)
Who uses cloud inventory management software?
Any business that makes, manages or moves products will need cloud inventory management software sooner or later.
But that covers a wide variety of businesses. An artisan bread maker and a lighting parts wholesaler, for example, have little in common — except that both are passionate about their products. And while they’ll both benefit from taking their stock management online, they may do so in different ways.
Key benefits of cloud inventory management software
The improvements you can make to a product business using cloud inventory management software are varied and numerous. Which is great, but it can make it tough to decide exactly what you want to achieve.
Happily, these improvements can be split into three broad areas: improving efficiency, growing sales revenue and scaling.
Inefficient product management holds businesses back. Growing a company is difficult when stock is going missing, levels are off and suppliers aren’t performing properly.
Here are three ways that the cloud can make you more productive.
1. Seeing where stock is
Upgrading from a periodic system to perpetual inventory management gives you complete clarity over where goods are without relying solely on stocktakes. With Unleashed, you’ll be able to see what’s in each warehouse — and what’s allocated to sales orders — at any time, from any location.
2. Matching levels to demand
Achieving a balance between risking stockouts and overstocking can be tricky. But by looking into past sales data to forecast demand, as well as using low-stock alerts and automatic reordering, you can avoid stockouts without wasting money on excess safety stock.
3. Managing suppliers
Supplier relationships are crucial to any product-based business. With cloud inventory management software, you can see who’s delivering on time, and who’s got the most competitive prices. It’s indispensable when negotiating future contracts.
Sales are the backbone of any business. An effective inventory system is often the key to maximising sales — ensuring that salespeople and channels are performing to their maximum potential and customers want to come back for more.
Here are four ways that inventory management software can power sales growth.
1. Empowering salespeople
Knowing what’s in stock, and when the customer might get their goods, helps salespeople to close. Cloud inventory management software systems make that information easy to find.
Unleashed, for example, comes with a Sales App that puts all the data your team needs to sell right at their fingertips, wherever they are. That means no more waiting for a spreadsheet to load, or manually checking the storeroom to see what’s inside.
2. Keeping customers happy
Dedicated inventory management software doesn’t just help in bringing new customers on board. By facilitating fast order fulfilment — and giving customers all the information they want before they make a purchase — it’ll help improve customer satisfaction as well.
3. Syncing sales channels
Adding new sales channels is a great way to access new opportunities. Cloud inventory makes selling and managing products across online stores, POS, and B2B much more straightforward.
Unleashed, for instance, comes with managed two-way integrations with leading sales channels including Shopify, Magento, Amazon and Vend — plus its very own B2B eCommerce Store.
4. Optimising everything
Learning from past mistakes and successes is pivotal to ensuring sales growth. Cloud inventory management software systems come with comprehensive reporting tools to analyse which products, channels, salespeople and regions are delivering ROI.
Growing operations without increasing costs and wasted time is a challenge for any successful company. Here’s how upgrading your software can help with adding new locations and SKUs, saving time and keeping staff costs in check.
1. Adding warehouses and SKUs
Adding a new stock location is a key milestone for a product business — but the extra complexity it brings can stretch your system to breaking point. With a dedicated system in place, adding a new stock location, SKU or sales channel takes minutes, not days.
2. Saving time
Cloud inventory enables you to automate the tasks that eat into your day-to-day as the company grows, so you can spend more time on high-value tasks. It’s a great way to deliver sustainable growth that doesn’t burn out employees and owners alike.
3. Staff costs
Improving efficiency means doing more with the resources you have. Unleashed customers have used inventory management software to scale their operations without employing a supply chain expert, or eating into their margins with an increased wage bill.
These are some of the headline benefits of a new system, but there are lots of specific improvements you can achieve as well. Read five more benefits of cloud inventory management.
Does my business need cloud inventory management software?
Now you know what cloud inventory management software is capable of, it’s time to assess whether your business will benefit from an upgrade.
How complex are your operations?
Smaller product businesses might be able to get by on spreadsheets — but you’ll encounter issues as you deal with complicated orders, add new SKUs and increase headcount. At some point, you’ll need a system that supports your growth: and cloud inventory management software does just that.
So how do you know when you’ve outgrown your current system? Here are some warning signs that we see crop up time and time again.
Inventory issues the cloud can solve
‘Where’s my stock?’
New SKUs, sales channels, warehouses, suppliers and staff all bring added complexity. That makes relying on stocktakes and spreadsheets for an accurate idea of what’s on hand — and where it is — increasingly problematic.
If you’re sick of having to physically check the warehouse to find out what’s in stock, then it’s time to look for a better inventory system. Cloud inventory will put accurate stock information in your hands at any time, from any location. It can revolutionise how you run your product business.
The multichannel meltdown
- Bob decides to sell his bikes across some new online sales channels. He’s done his research and soon sees a surge in sales orders
- But he can’t easily see where his stock is, or when he’s going to run out. So to meet the increased demand he has to order in large amounts of safety stock
- That damages his margins. But his inventory system doesn’t offer accurate margin reporting, so he can’t see where the problem is
- Adding new SKUs is an immense undertaking, as he can’t manage all his channels in one place
To solve these issues — or ensure they never arise — upgrade your inventory system.
Problems with spreadsheet systems
Excel and Google Docs are powerful tools for businesses of all sizes. But that doesn’t mean they are up to the task of managing complicated stock processes:
- They don’t integrate with accounting systems or sales channels, meaning lots of wasted time manually entering data
- They don’t give accurate figures in real time, so it’s hard to gauge the value of what’s in stock
- Often, only one or two employees understand exactly how they work. If that employee resigns, they take that knowledge with them
- It can be difficult for multiple people to access them at once, or for anyone to access them remotely
Dedicated inventory management software is the natural next step for SMEs who have outgrown spreadsheets. Find out more about how spreadsheets can hurt your inventory management.
Accounting software — limited potential
Accounting platforms can be a good option for managing inventory online, but they aren’t designed specifically for the task. One issue we see time and time again is transaction limits.
Many accounting platforms have a soft transaction limit, often at 1000 per month. That’s fine when uploading transactions in bulk, but not when using an accounting system to manage goods.
A dedicated system will fix this issue. Unleashed, for example, has unlimited transactions. It can even batch transactions daily to ensure you stay well within the limits imposed by you accounting system.
Lack of ERP flexibility
ERPs and business management solutions often offer sophisticated functionality. But accessing that functionality can be difficult thanks to hard-to-use systems or high maintenance costs. When Haribo went live with SAP in 2018, for example, the disruption to its supply chain and operations resulted in lower sales revenue.
See how Unleashed and a few cloud apps stack up as a best-of-breed solution against Sage 200.
Are you missing any important features?
Perhaps the single biggest reason why businesses leave their current system behind is that it doesn’t offer a feature they need to manage stock efficiently.
If you’re using software that wasn’t designed specifically for the task of inventory management, then there’s a strong chance you won’t be able to:
- Track stock by batch or serial number
- Utilise dropshipping
- Assemble components into products
- Split shipments
- Track stock across multiple warehouses
- See accurate landed costs
- Sell stock at multiple price points
- Keep up with auditing requirements
If you’re unsure whether your inventory solution is making you inefficient, there are lots of resources and tools to help you decide. The New Zealand Ministry of Business, Innovation and Employment has a useful tool and guide — and we’ve created our very own inventory requirement calculator.
Are you ready to upgrade?
Upgrading to inventory management software is a big step — but it shouldn’t take much to ensure you’re ready. Exactly how much work you’ll have to put in depends on how cloud-ready your business is.
If you’re already using a cloud accounting software such as Xero or QuickBooks Online, then it should be as simple as picking software that integrates with your existing solution and moving your processes over.
If your systems are entirely offline then now’s a great time to consider adopting a few different apps to fully take advantage of the cloud. Unleashed integrates with systems for accounting, CRM, POS, online sales and more. It can function at the heart of your app ecosystem.
Choosing the best inventory management software for your business
Choosing the right cloud app for your requirements can be tricky. You need to ensure that it fits your unique business requirements, and helps you achieve your goals — that it delivers ROI.
Follow these three steps to make picking the best stock management software simple:
Evaluating your needs
First up, audit your business to understand what to look for in your new inventory management software. Different solutions will suit businesses of different types and sizes, with varying goals, personnel and expertise.
Types of product business
Your type of business plays a significant part in deciding the features and functionality you’ll need from your software.
Manufacturers, for example, might want software that features serial number tracking to get complete clarity over their production process. Wholesalers and distributors, on the other hand, might care more about access to a B2B store — so they can save time by enabling their customers to self serve.
Find out more about inventory management for each industry including:
Your main use case and business goals
Your main use case is the most significant achievement you’re hoping to make with your software. For example, it could be managing purchasing, stock or sales orders.
That’s an important consideration when evaluating software, but it’s a good idea to take your overarching business goals into account too.
Let’s assume you’re brewing beer, for instance. By moving to the cloud, you’re hoping to manage purchases better — that’s your main use case. But your overall business goal might be to get listed by a supermarket.
If you focus solely on finding a solution with a strong purchase management module, then you could end up with one that doesn’t support your broader business goal of getting listed.
Who’s going to use your inventory management software?
Next up, it’s time to assess who’ll be using the software. This is useful when looking at pricing: it’ll help you decide how many users you require as well as who’ll need training.
You might also want to consider user permissions or useful tools for specific teams. Your sales team, for example, don’t need to see BI dashboards or make stock adjustments — but they might benefit from a dedicated sales app.
Integrations — what apps are you already using?
The last (but very much not least) consideration is the apps you’re using. Inventory management software can act as the core of your suite of apps: for instance, by collating orders from your sales channels and sending the relevant data to your CRM, accounting and reporting systems.
So take a look at all the apps you currently pay for and decide where you could save time by integrating them with your inventory solution.
It’s also worth thinking about what apps you might use in the future. If you think you might want to sell on Amazon down the line, for example, then pick an inventory system that syncs with Amazon for sales orders.
Best-of-breed apps vs ERP
Cloud apps and ERPs offer two different methods of managing your business operations.
Cloud inventory solutions are ‘best of breed’ applications that are designed specifically for the task of helping you make, manage or move products. Typically, a product business might pick a few of these apps for specific tasks: such as accounting, inventory, CRM or commerce.
ERP systems, on the other hand, are more comprehensive systems that cover lots of different aspects of your business. Instead of picking multiple focused solutions, you’ll buy a single package to manage everything.
This might seem like a powerful proposition, but ERP systems come with lots of downsides:
- Many aren’t cloud-based, which means they’re difficult to install and keep updated. The cloud-based systems that do exist are new and relatively untested
- They tend to be inflexible. You’ll have to redesign your business processes to fit the new software, instead of picking a tool that fits your specific requirements
- You have to invest a lot of time into set up and training. Getting started with an ERP often takes months
- You have to pay sizable upfront costs — often for functionality you won’t use
- You also have to pay steep maintenance costs. Any updates or enhancements require an upgrade, or you might have to pay a consultant to make changes
Picking inventory management features
The list of features you can get with cloud inventory management software is almost limitless, but can broadly split across supply, production, inventory, sales and reporting.
Purchase order management software
The purchase order functionality in an inventory system is designed to make creating and sending purchase orders straightforward. Once you receipt goods into the warehouse, cloud inventory software will automatically update your stock levels.
Some software also provides a platform to make your supply chain more competitive: enabling you to compare your suppliers’ performance, source components in multiple currencies and see the exact cost of each purchase.
Key features to look out for: Returning stock, buying in multiple currencies, average landed cost tracking, receipting partial orders, supplier management tools and reorder reports.
Production management software
Inventory management software will benefit any product business, but it’s crucial for manufacturers.
Not every inventory solution will come with an in-built production module. But those that do enable you to create ingredient lists for your goods and components in the form of bills of materials, control inventory across every stage of production, track your precise margins and plan future production levels.
Key features to look out for: Multi-level bills of materials (BOMs), assemblies and dissassemblies, batch tracking, serial number tracking, production planning, and auto-assemblies.
Stock management software
The stock management section of your system will show you precise levels of stock for every finished product you sell — and include features to help you keep an eye on where everything is located across multiple warehouses.
One particular area where lots of businesses find inventory management software useful is stocktaking. Perpetual inventory systems reduce your reliance on stocktakes for accurate figures, making the process less exhausting. And advanced features such as barcode scanning go a long way towards automating the process.
Key features to look out for: Multiple warehouses, barcode scanning, stock enquiries, minimum and maximum levels, stock counts and average landed costs.
Sales management software
There are two levels to the sales management features you’ll find in an inventory system. Standard features help you fulfil orders while maintaining accurate inventory data, providing an intuitive process to follow for creating quotes and orders — while automatically updating stock levels and margins.
Next-level features help you grow sales orders and revenue. A B2B eCommerce Store, for example, grows wholesale orders by enabling customers to self serve online. A Sales App, meanwhile, gives salespeople all the data they need to close, anywhere and anytime.
Key features to look out for: Split shipments, customer management, sales apps, B2B eCommerce, eCommerce integrations, POS integrations, customer pricing, quantity discounts, flexible customer returns, pick and pack, label printing.
Don’t overlook reporting tools as you assess inventory management software — they can help unlock your business’s true potential.
As well as researching the reporting tools that come with each inventory package, take a look at how its integrations work. Combining data from several different apps can help you achieve even more with your reporting.
Key features to look out for: Forecasting, sales reports, production reports, purchase order reports, KPI tracking.
Choosing cloud inventory management software
Now you know which features you’re looking for, it’s time to find an app that suits your requirements.
First of all, find out which apps exist that might work for your business. There are a few different places to look:
- If you’ve already got cloud accounting software in place, then take a look at which apps they work with and go from there. The Xero Marketplace or QuickBooks App Store, for example, have lists of options alongside customer reviews
- Your accountant may also be able to advise on which apps are out there — or point you in the direction of someone that can
- Independent review sites such as Capterra or GetApp can be a great way of seeing what exists
- Asking the companies you work with which technology they use to manage their products and processes
Once you have a list of different options, it’s time to see how they stack up against each other. As we’ve already seen, there’s a huge range of different features and factors to compare here.
The value of an app doesn’t begin and end with its features, though. Before you start hunting for a specific solution, it’s worth taking a few other factors into account:
- Support. Different app providers have different levels of support as you set up and learn your new software — and once you’re fully live. A local support team, onboarding service and support forum can make a huge difference
- Price. Make sure to calculate the actual cost of each app. Most providers offer flexible pricing plans, so take the number of users, specific features you need and whether you want monthly or annual billing into account
- Reliability. Software that’s often inaccessible due to faults or scheduled maintenance, or that doesn’t fix bugs fast enough, is going to cause problems. Customer reviews can be an excellent way of spotting an app that isn’t running as well as it should be
- Updates. It’s also worth researching how often each provider releases updates — which with cloud inventory management won’t require any installing. Unleashed, for example, releases improvements every two weeks
Picking an app
To understand whether an app might work for your business, you’ll need to experience it firsthand. So sign up for a free trial with your preferred software and start using it to manage inventory in your business.
By allocating a couple of weeks to trialling each solution with your actual inventory data — and getting the right staff using the system during each trial — you can be sure that you’re making the right choice.
Start your free 14-day trial now. All features included. No credit card needed. Sign up now
You can also set up a discovery call with an app provider. They’re a great way of quickly finding out whether a solution will work for you. Instead of trawling the provider’s website for information, you can get all the answers you need in less than 20 minutes.
Before a call, it’s a good idea to set out exactly what you want to find out. By now, you should be aware of what you’re looking for, so write down a few key questions so you get maximum benefit from the 20 minutes.
Book a discovery call with an Unleashed expert here.