Inventory Reporting

An inventory report is a catchall term covering any reports relating to purchase management, production management, what’s on order, in production, in the warehouse and allocated for sale, and sales reporting.

Keeping up-to-date inventory reports helps business owners track the movement and profitability of their stock. They can be written in different forms and lengths, but good inventory reports will always be clear and exhaustive.

It’s essential to create an inventory report to sustain a healthy product business. It enables you to identify problems quickly, control costs and get more satisfied customers.

Identify problems quickly

Stock reports (also called inventory records) detail everything that comes into and out of the warehouse. When kept up to date, they can help you identify any problems affecting performance: such as product loss through theft, obsolescence or dead stock.

Optimise stock levels

Good inventory reports enable you to identify trends and opportunities. This informs optimal reorder quantities, allowing you to minimise the risk of over and understocking.

Control business costs

Up-to-date inventory records help you keep up with your costs. They can show you which suppliers offer the best deals, freight and transport costs, cost of returns and more so you can adjust your expenses accordingly.

Inform business goals

Inventory records identify the metrics and key performance indicators (KPIs) that can help you when it comes time to set attainable goals so that you can give direction to your business growth.

Maintain customer service standards

Using inventory reports, your customer service team or sales rep will know where to quickly get the right stock and pricing information for customers. If customers face delays and long wait times, they might switch to a competitor who can provide them with the right information and products quicker.

There are hundreds of potential inventory reporting metrics, ranging from the simple to the sophisticated.

At the basic level, inventory metrics track stock that’s coming in and leaving your warehouse. Consistently tracking your inventory allows you to spot trends and gain insights to make better data-driven decisions for your company. Here are six metrics every product business should be using.

1. Sales volume

Sales volume is the number of units sold within a given reporting period. It may be monitored at the level of product, product line, customer, subsidiary or sales region.

2. Sales revenue

Sales revenue is the amount of money that is brought into the business from the sales of products and/or services over a period of time. Revenue is calculated as:

Did you know?

Unleashed customers increased sales volume by 13% on average in 2018. Not only that, but their sales value increased by 25%!

3. Profit

Fundamentally, profit is how much money your business is making. It’s calculated as:

Gross Margin is often used interchangeably with Gross Profit, but the terms are different. When referring to a monetary amount, use Gross Profit; when referring to a percentage or ratio, use Gross Margin instead.

Learn more: What is a good profit margin?

4. Gross Margin

Margin, or gross margin, tells business owners and other stakeholders the percentage of sales revenue remaining after subtracting the cost of goods sold.

Calculating margins help us to understand the relative profitability of a firm. Gross margins are calculated as:

Did you know?

Great inventory management software can help you better make, manage or move your products — just look at Unleashed customers: they increased their margins by 5% in 2018.

5. Cost of Goods Sold

The cost of goods sold (COGS) tells you how much it costs to produce your products or services.

Knowing your COGS helps you make informed decisions, such as whether your raw material costs are weighing heavily on your overall expenses.

To calculate your cost of goods sold , you need to work out what you spent on the products you sold to your customers. It sounds simple, but with costs fluctuating over time, getting an accurate figure can be tricky. And without an accurate figure, you won’t be sure of the margin you’re making — or what the value of your remaining stock is.

There are three main ways of calculating COGS: FIFO, LIFO and average landed cost.

6. Number of customers

The number of customers gives an indication of performance compared to previous periods. Businesses can group customers based on the value of their purchases, and develop plans to serve the requirements of each group.

Average landed cost

The number of customers gives an indication of performance compared to previous periods. Businesses can group customers based on the value of their purchases, and develop plans to serve the requirements of each group.

Did you know?

Unleashed customers experienced 6% growth overall in their customer base from 2017 to 2018!

Now that you know which basic metrics you need to be tracking, read our comprehensive guide to identifying the types of inventory reports you need to be using to track detailed performance across your purchasing, production, stock and sales.

1. There are two ways to create an inventory report – manually or automatically. Using inventory management software, such as Unleashed, helps reduce errors by using real-time data. 
2. Connect your Point-of-Sales (POS) or Enterprise Resources Planning (ERP) systems to generate comprehensive reports. If you’re creating a manual report, this data will need to be exported from your chosen systems.
3. Accuracy in an inventory report is vital. This depends on the underlying data that is used. Ensure all figures are correct and investigate any incorrect occurrences. 
4. Insert graphs and charts into your report, allowing for the information to be understood and trends to be spotted. 

What should an inventory report include?

Just like the variety of performance metrics, there are many different elements an inventory management report could include. However, there are six that are vital. Your inventory management report should include:

• Current stock levels of each product on hand
• Detailed notes of product movements – stock in, out and being sold
• Financial value of inventory at a specific time – monthly, quarterly or annually
• Location of each product 
• Status on products currently in production or on order
• Detailed notes of profitability of each inventory item 

Unleashed’s real-time inventory management software is designed to automate your processes, keep track of your inventory and lift profit margins while saving you time.

Our inventory management software:

• Simplifies stock takes with rolling stock takes
• Gives you total traceability with real-time tracking features 
• Get in-depth reporting with Business Intelligence 
  And much more. 

Explore what inventory management software can do for your business and start your 14-day free trial today.  

How BCE Catering Equipment maintained inventory accuracy with Unleashed

BCE Catering Equipment, a business-based supplier for kitchen equipment in New Zealand, chose Unleashed after wanting to move to a cloud-based inventory system that wasn’t clunky. 

The team are dedicated to bringing new products to the market and with various sales channels, they needed a system that gave them accurate reports. BCE Catering Equipment can work on a true cost basis, maintaining their complete inventory management accuracy. 

Read BCE Catering Equipment’s story