For many small business owners, inventory management takes a back seat to things like generating revenue, personnel issues, servicing customers or raising financing, but it shouldn’t. Whether you’re in retail, wholesale, distribution, or manufacturing, hospitality or even most service businesses, effective inventory management is key to running a profitable business.
Poor inventory management can lead to huge loses and, in fact, is one of the top ten causes of small business failure, according to Michael Ames in his book, Small Business Management.
If you are just getting started in business and have to pay cash for your inventory, or if you sell items on credit and have to wait months for payment, poor inventory management can cripple your cash flow.
One of the most important aspects of inventory control is to make sure you have the right items in stock at the right time. Often, that takes careful planning. Fashion retailers, for example, must order new styles months in advance. Inventory management in The Bahamas is made even more difficult due to the fact that many items that a business needs has to brought in, often by ship, which adds extra time between ordering and delivery. Of course, Family Island businesses need an even longer lead time.
In order to keep the right mix of products on the shelves, a business needs to think through the entire supply chain process. Too much inventory can tie up working capital, but too little inventory can lead to shortages and lower customer satisfaction.
There are several proven methods for inventory control. From sophisticated computerized inventory management systems all the way down to simple methods used by Mom & Pop at the local tuckaway.
It is important to use the system that is the best fit for your business.
Here are four of the most popular manual inventory
- Visual Control involves examining the stock visually to determine if additional inventory is required. This method could be used in very small businesses where records may not be needed at all, or only for slow moving or expensive items.
- Tickler control involves physically counting a small portion of the inventory each day, so that each segment of the inventory ends up being counted every so many days on a regular basis.
- Click sheet control enables a manager to record the item as it is used on a sheet of paper. Such information is then used for reorder purposes.
- Stub control (often used by retailers) enables the manager to retain a portion of the price tag when the item is sold. The manager can then use the stub to record the item that was sold.
As a business grows, it may find a need for a more sophisticated and technical form of inventory control. The use of computer systems to control inventory is the method of choice for many growing businesses because company accounting and billing procedures can also be handled on the computer.
Point-of-sale terminals relay information on each item used or sold. The manager or business owner can receive information printouts at regular intervals to review and take appropriate action.
An inventory control or inventory management system, need not be expensive. There are many low-cost or no-cost solutions that can do an excellent job.
We’ve examined a few excellent programs which have been developed by a community of open source developers. Several of these systems include features similar to high-priced commercial solutions but these systems are free to use, making them ideal for small businesses that want to save money on their operations budget.
A disadvantage to open source solutions is the technical knowledge to set up and customize the program. But usually the cost of hiring a competent program developer will be far less than the money needed to buy a comparable commercial solution.
Computerized Inventory Management and POS Systems
Shameless Plus: For a modest fee, BahamasB2B programmers can install, setup and customize any of the Open Source programs listed below.
Listed below are various inventory management solutions, ranging from a simple spreadsheet template to sophisticated point-of-sale systems. When evaluating solutions, be sure to choose one that has the features your business requires.
If you need help implementing any of the solutions listed below, please contact BahamasB2B. We are very familiar with all of these programs and we offer a free evaluation of your inventory management needs. BahamasB2B can supply hardware, software & installation of your inventory or POS system.
Simple Inventory Management System Using an Excel-type Spreadsheet
Use these basic inventory-tracking templates in Microsoft Office Excel or Open Office to keep track of inventory and analyze the cost of goods sold. There are several to choose from with different features.
Netkiller Cloud Barcode Scanner for Google Apps
Enables the barcode reader to scan barcodes and record them in your Google Spreadsheet for inventory and asset management. Can be used with several varieties of USB Barcode Scanners and Smartphones. No third party applications necessary. Cloud based barcode scanning functions. No database required, information id stored in your Google Docs (GDocs).
A full-featured, free, web-based accounting system for small companies. Simple, but very powerful program that can handle the entire Enterprise Resource Planning (ERP) system to manage and coordinate all the resources, information and functions of a business. Including: Purchase Orders, Receivables, Invoices & Credits, Payments, Accounts Payable, Inventory, Sales Orders and more. The program comes with excellent documentation and instructions. There’s even an online demo available.
QuickBooks and Fishbowl
This is a commercial system but provides very good value for your money. QuickBooks, of course, is the most popular accounting software for small and mid-size businesses. The Fishbowl Inventory system integrates seamlessly with QuickBooks, adding functionality to allow you to effectively manage your inventory. There is an online tour and you can download a free trial.
Open Source POS
Another extremely powerful point-of-sale system written in the PHP language. The web based program requires a web server (available from BahamasB2B) and uses MySQL as the data storage back-end. Setting the configuration of the store is logical and straightforward and there is a simple user interface. Existing lists
of Items and Customers can be imported from CSV (Comma Separated Values) files.
Used by several major restaurant chains in the U.S., this program is easy to use and ideal for restaurants with multiple locations. Easily supports multi-lane setups, including the ability to start a sale on one register and finish on another. Managers can access summary and detailed reports from any machine with an Internet connection. Program can also track customer’s names, addresses and phone numbers.
POS terminals, Web servers, PHP programming, MySQL databases, installation, complete customization, consultation and training are all available from BahamasB2B.
We know as well as anyone that you’ve got a lot of things to think about in order to run your small business. Let BahamasB2B help you set up an inventory management or POS system that’s just right for your business, using open source software that keeps your costs down.