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Software Inventory Tracking - Software is Required for Accurate Inventory Tracking

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A physical inventory of goods is the most expensive asset a business possesses and actively tracking the inventory is necessary to ensure profitability. When a business takes a casual view of keeping track of the inventory, profit margins narrow and only an audit will reveal the trend. By the time the discovery of a diminishing inventory is made, business is far enough off track to require an infusion of cash or final closure of business operations. Unfortunately one of the most common reasons for a declining inventory is theft, not just from customers but from employees as well. When this troubling discovery is made, security measures must be increased to define the problem and provide concrete proof so the problem can be resolved permanently. Software for inventory tracking performs essential functions, including: storing product information, inventory level management, and adjustment based on sales and purchases.

Newly implemented software applications must be loaded with an accurate count of the actual inventory in storage, on the shelves, and in any other locations including delivery and service trucks. Most businesses will close for one or two business days to take a true picture of the goods available for sale. Information concerning every product is entered into a database that will be updated by sales activity. Throughout the life of the business, actual inventory levels must be verified against the database values to ensure accuracy. Business taxes are no longer paid on inventory levels, but most accountants ask for an accurate inventory to create the balance sheet of assets and liabilities as the new fiscal year begins. When compared against the previous year, an idea of the cash flow is figured and adjustments can be made.

Reports are run against the database on a weekly basis to search for product levels that have dropped below the optimum level to sustain sales. The most popular items can be reordered often while products that sell only periodically can be ordered less often to improve cash flow. Orders are placed and when the product is received, the database is updated to reflect purchases that have been added to the physical inventory. Verifying every order is essential to track backordered and discontinued items that were not received. Dates of arrival are tracked to determine which items do not sell and could be discounted. Software for inventory tracking provides information concerning aging perishable inventory that must be overturned. Another function of the software is to track any recalls against the product inventory and how many of those items must be pulled and returned to the manufacturer.

Every sale over the wholesale or retail counter and the fulfillment of sales from the ecommerce website, must cause updates to the inventory database to be made immediately. When a brick and mortar business is running alongside the online website, accurate inventory information is critical to the success of both. When an online customer can see that an item is currently in stock, the probability of selling that item is increased. Inaccurate inventory values can cause lost sales and possibly discourage repeat customer loyalty. As the database values are updated, reasonableness checks are run to see if the sales accurately compare to the remaining inventory. Any item that has been given a negative inventory value is placed on a report to be checked by a person. When a customer returns an item for refund or replacement, the inventory levels must be updated to reflect the changes.

While the business processes are being refined to align with software used for inventory tracking, additional steps will seem burdensome. Employees will balk at the attention that must be paid to so many details until the verification activities pay off by reducing loss and increasing profitability. Verifying the inventory may be performed in stages to ensure accurate counts and up-to-date database information is maintained at all times. In high-volume operations that require constant inventory levels, software will provide the information needed to manage every aspect of the physical inventory and promptly meet customer needs.

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