What is Inventory Management Software?
Inventory is the goods or materials a business keeps in the warehouse to sell to customers for profit. Inventory management software is a software system for tracking inventory levels, orders, sales, and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages.
Key Functionalities of an Inventory Management System
- Receive purchase order
- Pick, pack and ship sales
- Quoting and invoicing
- Returns management
- Reordering
- Serial number tracking
- Lot ID tracking
- Kitting/bundles
- Manufacturing — Bill of Materials (BOM)
- Label printing
- Customized data fields
- Sync invoices and bills to QuickBooks
Why is inventory management important?
Inventory can be a company’s most important asset. Inventory management is where all the elements of the supply chain converge. Too little inventory when and where it’s needed can create unhappy customers. But a large inventory has its own liabilities — the cost to store and insure it, and the risk of spoilage, theft and damage. Companies with complex supply chains and manufacturing processes must find the right balance between having too much inventory on hand or not enough.
Is Free Online Inventory Management Software Good for your Small Business?
If you maintain inventory then it is important that you must have clear visibility of your inventory and you should able to track it by sales order or by purchase order. If you can satisfy your customer by providing timely service then only you can grow. For a small business it is very important to run the business effectively with optimized resources so that it can make enough profit and grow.
There is always an temptation to start maintaining inventory in spreadsheet. This can be a good solution if it is a one person run company and have only few orders in a month. As soon as you add more people and get more orders then you will need a proper inventory management solution to scale.
We have seen many small companies look for free inventory management software. It is a good idea to have a free software for you to try at the beginning. But using a free solution for actual business is dangerous. First of all, you may not own your data because it is free. If data are shared with others or data are lost then no one will be responsible. Secondly, only a minimum set of features are available for a free product which may not be a fit for your business. Moreover, there is always a catch in free product — no one can survive giving you free service. They have to make money to survive. So, you will end up paying some way or at later stage. So it is important to look for a product which fits your requirements rather than a free or cheap product.
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