Essential Tips for Effective Inventory Management
Effective inventory management is vital for any business to function sustainably. Everything has to be recorded, from raw materials to finished products, to ensure you don’t face any delays that could’ve been avoided.
At Remote Quality Bookkeeping, we offer a range of convenient, reliable, and cost-effective bookkeeping services to help small and medium-sized businesses improve their processes. Here are some essential inventory tips from our experts that we’re sure will be helpful to ensure your sustainability and growth.
Categorize Your Inventory in The Order Of Priority
Some items in your inventory are more important than others. They need to be restocked more frequently, and your business has more to lose if you run out of these items. There are several ways to categorize your inventory, but we recommend you keep item priority your top priority. Categorize your inventory into groups of items in terms of how frequently you need to restock them, so you’re less likely to make costly mistakes.
Keep A Buffer Inventory
You probably restock different items in your inventory periodically—but what do you do if you run out of some essential items before the restocking date? A buffer inventory is a smaller inventory that you keep as a cushion for unexpected inventory needs.
You don’t need to include all the items in the main inventory in your buffer inventory. Surely, some items are usually not needed urgently, and you don’t lose much for resticking only when you run out. Keep the most frequently needed items as safety stock in your buffer inventory.
Audit Your Inventory With Your Process Cycles
Different businesses audit their inventory at different frequencies. If you have a big enough warehouse, auditing your inventory once a month or even once a year may be sufficient. We recommend auditing categories at different frequencies according to your process cycles. You can audit your inventory after each process cycle or after a fixed number of process cycles.
For example, if your production line has a process cycle of exactly one week, you will benefit from auditing the inventory for that process weekly. If you currently audit monthly, consider auditing every four weeks, so you’re better in sync with your process cycles.
Outsource To a Xero Certified Bookkeeper
Cloud-based accounting has opened new doors for outsourcing inventory management to professional bookkeeping firms. Xero is currently a preferred choice of cloud-based accounting solutions among accountants and small to medium-sized businesses. If you want to inventory managed conveniently and securely, we recommend outsourcing to a Xero Certified Bookkeeper like Remote Quality Bookkeeping.
At Remote Quality Bookkeeping, we’re a reputable outsourced bookkeeping company that can offer reliable and secure solutions at competitive rates. We also offer forensic bookkeeping and payroll outsourcing for accountants.
Want your inventory running smoothly? Get in touch now!