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Whether you run a small business with a handful of employees or a large business with a large number of workers on your payroll, keeping your inventory organized and knowing the quality and quantity of your sales is important to the success and profitability of your business and an inventory system will help organize and catalog your products to ensure that your inventory is kept up to date.

Manual or Automatic? Which way should I go?

Depending on the size of your business you may choose to keep control of your inventory manually.  In particular, with a smaller or start-up business that still needs to acquire a firmer grasp on their product flow, there is no substantial data on which to base a concrete inventory system.  Investing a considerable amount of money into an inventory system without having a strong grasp of the nature of your clientele, their demands, and the effects on your warehouse operation can lead to an ineffective system being installed.  Many small business owners prefer to keep the initial inventory system at a manual level.

For a small but deserving investment, there are many automated inventory systems available.  The most common methods of scanning and control are barcode and radio frequency scanners.  These systems help automate the control of your inventory and ease the pressure from workers, while decreasing your rate of error.

Perpetual versus Periodic Inventory Systems

Inventory systems fall under two main categories: Perpetual Inventory Systems and Periodic Inventory Systems. Using the perpetual format, your inventory is revised and renewed in real-time.  As every sale and return is made it is recorded and your inventory data is refreshed to reflect this latest information.  An older and less convenient method is the periodic inventory system.  In this system, a certain time frame is chosen and the data for your inventory is summarized and accounted for at the end of each time period.  This method may seem less convenient, but for smaller businesses that do not want to invest in point of sale scanning devices, and other high-tech machines just yet, this system may be the preferred option.

Automated Inventory Systems: Above and Beyond Data Production

Regardless of the automated inventory system method you choose, most inventory systems utilize software that can do much more than simply keep track of the inbound and outbound flow of your products.  Provided that you chose the right developers to configure your inventory system you can utilize the additional positive aspects of inventory systems.  A well-configured system will go beyond the base numbers and facilitate flow through the production, procurement and sales processes, even going so far as to ensure that the correct prices are allocated to your products in different locations, factoring in local taxes and financial conditions.  Developers can customize software to your specific database and help you in constructing the most beneficial system, fine-tuning it to your business' needs.

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