As an inventory manager, you are working tirelessly to manage your inventory and logistics, pursue your long-term vision, develop relationships with suppliers and handle the everyday relationships that come with managing inventory. It’s these responsibilities that take preference and daily inventory management administration and accounting tasks may fall behind. The problem with dealing with emerging challenges and dealing with the daily tasks is that it can hamper your financials and limit your business growth. The overall business health is closely tied to inventory management.
1. Accuracy and Visibility
Without up-to-date inventory records, you risk accuracy and visibility which in turn means that you are making uninformed decisions and hindering your business profitability. When your inventory tasks are prioritised, you are able to leverage the insight to improve your company.
Some of the essential metrics you should be tracking:
- How many orders do you experience daily, weekly or monthly?
- What’s the status of your outgoing and incoming stock?
- Has the Inventory Management System been updated?
2. Understanding your Business Drivers
Do you know which products are selling and which products are deadstock? If you aren’t practising proper inventory processing, then you probably have an idea which products are selling but nothing in concrete. Your inventory records provide the necessary information to determine how much stock you have on hand, what stock you are waiting on, what products are selling and you are able to track against sales objectives.
If you are meeting your sales objections or are failing to meet the targets, you need access to up-to-date information to move the business forward.
3. Ready for Peak and Down Periods
Business growth isn’t linear. There are ebbs and flows throughout the year. If you are tracking your inventory management consistently and accurately, you can predict these changes. Tracking will help your company prepare for the spikes in business so that you can acquire stock, train new staff to help manage the peaks. Accordingly, there will be down periods so you don’t want to over-invest in stock during these periods to prevent financial hardship.
4. Minimise Surprises
Your numbers should not be a surprise to you. If you track your numbers on a daily, weekly and monthly basis, you’re in a better position to be able to adapt to changes and change direction.
With the most current information at your fingertips, you can make smarter decisions. Don’t put out fires that arise as a result of not knowing what is coming.
5. Have a Set Business Direction
Your inventory and accounting are your business compass and set the direction for the month. When you hit your sales targets, it’s a good month. The only way to accurately forecast is to diligently track your KPI’s against the actuals.
If all of these benefits sound great, but you don’t have the capabilities to support daily and proper inventory processing, consider outsourcing the service to experts in the inventory accounting field.
- Experts in the inventory accounting field have the knowledge and resources to:
- Keep solid and consistent records
- Understand and able to use inventory management systems
- Identify and communicate inventory management realities
- Manage inventory-related responsibilities
- Coach you on making smart inventory decisions
- Make recommendations based on historical and future insights
- Deliver valuable insight
Whether you take advantage of outsourced inventory management services or manage it in-house, don’t let the daily management go unprioritised. One of the best steps you can take to grow your business is to implement a strategy and plan for daily inventory processing.
Download our Inventory Accounting Checklist to help identify your daily, weekly and monthly tasks
The WAO Group specialises in pioneering inventory management excellence through systems, training and business services that help fill the gap where your in-house team doesn’t have the time or the expertise. Our expert WAO Business Services team are all qualified accountants trained on the systems you already know and love, as well as the potential systems that you may move to in the future.
Find out how you can save time with WAO Business Services Daily Inventory Processing Service