One of the best reasons to upgrade your point of sale (POS) software is to add inventory management capabilities. Merchants, especially small to medium-sized businesses that are ready to upgrade from a cash register or basic POS software, will see a tremendous increase in efficiency. Maybe more importantly, you’ll also see a tremendous decrease in inventory costs when you streamline and automate processes with an inventory management system integrated with the point of sale.
Here are four reasons that every minute you delay upgrading to an inventory management system is costing you money:
1. Overstocks and Carrying Cost
There is no advantage to buying more stock than you need. If you can’t sell the inventory you’ve purchased, you’ll have cash flow problems. Overstocking seasonal items can lead to markdowns to try to move them at a lower price, and ordering too many items with an expiry will mean waste. Also, storing more inventory than you need means you are paying higher inventory carrying costs than necessary for storage space, insurance, depreciation, labor, taxes, and more.
An inventory management system gives you greater visibility into stock on hand so you can order in the right quantities. Data on past sales or trends, collected by your inventory management system, can also help you forecast more accurately.
2. Inaccurate Inventory Counts
An inventory management system provides you with real-time inventory data. You don’t have to wait for an inventory count. Your system will reflect merchandise that you’ve received, and it will update when items are sold. An integrated POS system that includes e-commerce and inventory management gives you a total picture of inventory across your entire business. Maybe more importantly, your online customers will have an accurate count when they’re shopping online, and sales associates can help in-store shoppers confirm availability and find the items they’re looking for.
3. Shrinkage You Could See in an Inventory Report
Shrinkage is a big problem for retailers — and their profits. According to the Sensormatic Global Shrink Index from Tyco Retail Solutions and PlanetRetail RNG, U.S. retailers lost $42 billion to shrinkage in 2017. Shoplifting, including organized retail crime (ORC) accounted for 35.6 percent of losses globally, and internal factors, including employee theft, added up to 24.5 percent of shrinkage.
Inventory management systems also feature detailed reporting that helps you keep a close watch on inventory and helps you pinpoint the source of the loss. With this insight, you will see if you need to take further action to curb losses at your business.
4. Routine, Time-Consuming Tasks
An inventory management system allows you to automate tasks, operate more efficiently, and increase data accuracy. Using a barcode scanner or RFID reader, you can collect inventory data when merchandise is received and update it as items are moved to the sales floor and sold. An inventory management system can also shave hours off inventory counts — and help you complete them more accurately. Integrate your inventory management system with accounting and other back office systems to eliminate double entry and to increase efficiency throughout your entire operation.
Fewer Out of Stocks, Happier Customers
Besides avoiding all of these pitfalls, maybe the best reason to implement an inventory management system is for better customer experiences. Whether they are shopping online or in a physical store, customers want accurate item availability information, down to size, color, and style. Don’t run the risk of disappointing customers who researched an item online and traveled to your store to purchase it — only to find out that it’s out of stock.
Accurate inventory data can also help sales associates locate items that are out of stock in one location and have them shipped to the customer’s home or to a store for pickup — saving the sale, and, maybe, saving the customer.
For more information on how an inventory management system can make a big impact on your business and your bottom line, contact Perfect POS.