Importance of Proper Inventory Management

Businesses, irrespective of size, depend largely on how records are created and managed the importance of this can never be overemphasized. Many aspects of your business should be properly documented. On today’s topic, we will be zooming in on inventory management for small businesses 

Inventory Management refers to the process of ordering, storing, using, and selling a company’s inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items.

Things to learn

• Inventory management is the entire process of managing inventories from raw materials (inputs) to finished products (outputs).

• Inventory management tries to efficiently track inventories to avoid both excesses and shortages as both extremes cause losses or risks to any business.

• Two major methods for inventory management are just-in-time (JIT) and materials requirement planning (MRP).

The idea with inventory management is to ensure you have the right quantity of both raw materials and finished goods to  satisfy customer demands while avoiding the costs associated with excess inventory and the risks of having low inventory levels. As a small business this proves even more important because your growth as a business is greatly tied to your ability to track every aspect of your business effectively.

Advantage of Inventory System on our QR Code enabled POS for your business.

It reduces stress; You are able to avoid disappointing your customers on finished goods and supply timelines. When you do not keep proper inventory you would constantly find yourself in a state of panic because you would really never be able to tell if you would be able to fulfill the next order or not. You would be frequently embarrassed when a customer comes in to make a purchase and after assuring them that you have what they need, you turn up empty handed with excuses. A proper inventory management would help you avoid this because it would enable you know how many units of each item you have in stock at every given moment.

Better Planning; 

It gives you an advantage to be able to plan your reorder in time, keep extra cash aside for your business to run more effectively and smoothly. As a business, if you have terrible inventory management, you would find it extremely difficult to plan your business activities effectively. You would find yourself placing orders for raw materials or goods so often that you would be eating into your profits because of the costs of logistics on small units of inventory. Imagine having to place orders for just enough units to supply a single customer and paying the same amount or close to the same amount in delivery as you would have paid if you placed an order for enough units to sell for a  2 week period.

 Easier Access To Funding When Needed;

With our POS you are able to secure business loans for your business, because with an inventory system you are able to present to banks your cashflow for your business which goes a long way to prove that you really do know what you’re doing. No matter the kind of funding you are trying to secure, you definitely would need to show your books and prove that you really are handling your business in the most efficient way possible before anyone really can pay attention to your request.

Imagine trying to secure a business grant from an investor and you are asked for your books, only for your books to prove that you are unable to handle your business in an orderly manner, this would only go to prove to your investors that when you receive the grant, it would only go a long way in increasing the chaos already existent in your business. This alone is enough to halt any funding process. Not even banks would give you a listening ear because you would find it difficult to repay your principal with the stipulated amount in interest. Having proper inventory records are the very first step in securing funding for any kind of business. Properly managed inventory easily leads to a better ability to manage other aspects of a business.

Guard Against Internal Theft;

If your business has staff on its payroll, not having proper and trackable inventory will give a lot of gaps in your business for theft which would equally prove to be difficult to trace or be completely untraceable. If your have people on your staff list who are dubious in their dealings, you would be providing them an express way of looting from your business. Staff as we already know tend to find smarter ways of beating smart inventory management systems, now imagine the favor you would be doing such staff when there is no inventory management at all.

There are different kinds of inventory management techniques which would not be covered in the scope of this post. You can easily make more research on the different kinds of inventory management techniques available and choose which of them would serve you best, and stick to it. The benefits of doing this far outways the downsides, if there are any downsides at all.

Qapitapay recognizes the importance of inventory management and decided to include a user-friendly inventory management software into our QR enabled POS devices so that you can easily manage your inventory and run your business more effectively. Investing in business in recent times does not come cheap, this is why the survival of such business is very important. We are excited by the numerous tools we  have to aid SMEs to improve and manage their business efficiently. We want you to be able to focus on what’s most important to you – serving your customers, while we take care of everything payments, making it easier and more seamless for you and your customers.

Guess what, you can get our android POS for as low as 10,000 naira down payment (spread the balance for up to 12 months) 

All you really have to do is call 08061403462 and we will put you through the process of acquiring a brand new QPay POS machine with an inventory management software you can begin using immediately.