by Deeksha Malik
Published on 25 October 2017
Have you ever tried to take a shortcut only to learn-the hard way-that your "quick fix" was just a short-term solution to a long-term issue?
You may be successfully managing your inventory through manual methods and workarounds right now; however, as your business grows, that isn't a sustainable strategy.
If you're using manual methods, you're spending too much time procuring, packing, and shipping orders. On top of that, customers won't tolerate delayed deliveries and errors, which could result from poor inventory management practices.
Luckily, there are plenty of inventory management tools that can help you oversee and track your inventory, as well as help with related tasks such as order management, payment tracking, reporting, and more.
To narrow down exactly what type of inventory management tool is best for you, start by understanding which features are essential for your specific business needs.
We've created this inventory management features guide to break down which features are core to an inventory management system. We'll take a detailed look into what each feature does, and how it can help manage your stock more efficiently.
To make things even easier for you, we've linked each functionality listed below to the inventory management tools that offer it, listed in GetApp's software directory.
|Inventory control||Helps you streamline various aspect of inventory management-from store planning to stock purchasing, and from processing orders to tracking shipments.|
|Order management||Includes a number of tools to support and manage key activities involved in fulfilling a customer order.|
|Accounting and payments||Supports tools to manage and record financial transactions and handle financial auditing and reporting.|
|Monitoring and reporting||Gives business a realistic view of ongoing operations. This feature provides functions that can help you keep a close eye on business activities, set up goals, and track them regularly for performance evaluation and reporting.|
|Shipping functions||Refers to the transfer of goods from the seller to the customer. It includes tools to track the location of products during transit, collaborate with delivery channels, manage returns, and more.|
|Relationship management||Includes functions that store customer data in an organized and centralized location, with the aim of improving engagement, exploring new sales opportunities, and building strong business relationships. Also provides functionality for maintaining strong relationships with suppliers and vendors.|
|Integrations||Integration capabilities allow businesses to link multiple business applications and build an integrated environment in which applications can seamlessly share data and functionalities with each other.|
To manage orders seamlessly, you need accurate and up-to-date information on what you have in stock, where it's located, what's out of stock, and what stock you'll need to replenish soon.
A powerful inventory management tool with inventory control functionalities can help you with all of that and more. Listed below are some of the functions that contribute to inventory control, which you can be on the lookout for as you consider inventory management systems.
|Barcode scanning||Lets users attach barcode tags or labels to each inventory item to track its movement within the warehouse and throughout the supply chain.|
|Demand forecasting||Allows inventory managers to record and analyze previous sales trends and forecast future stock demands. This helps ensure that a warehouse never runs out of stock during peak seasons or experiences overstocking during low demand periods.|
|Inventory optimization||Allows businesses to find a balance between the budget assigned for purchasing stock and their corresponding service-level goals. In other words, it assists with purchasing the right amount of stock that will be used within a fixed term, minimizing the chances of over or understocking.|
|Inventory tracking||Provides a real-time count for the stock currently available across warehouse locations.|
|Multichannel management||Allows users to manage sales through multiple channels-both online and offline-providing a real-time, centralized view of stock availability across all channels.|
|Multilocation||Allows users to track, control, and manage inventory across multiple warehouse and/or retail locations from a single platform for a complete view of stock availability and performance.|
|RFID||Radio-frequency identification (RFID) tags are electromagnetic chips, often attached with stickers, that store digital information. These microchips are used to read or write (using RFID scanners) product data and locations as they move throughout the supply chain, from production to point-of-sale (POS).|
|Inventory auditing||Supports the accounting process for stocked goods, including physical inventory counting, cycle counts, and RF (radio-frequency) support.|
|Transfer management||Facilitates the movement and tracking of stock between multiple warehouse facilities to compensate for an inventory shortage at a particular location.|
Tracking an order from the time of purchase to the time the customer receives their item means monitoring a multitude of touch points. A single misstep can throw off the entire order, resulting in an unhappy customer.
An inventory management tool with order management features can help you achieve a better success rate for order fulfillments. The key functionalities that support order management are listed below.
|Order fulfillment||Streamlines activities involved in receiving, processing, and delivering orders to customers, from receiving sales inquiries to delivering the final product.|
|Order processing||Allows businesses to streamline order dispatch and delivery operations by managing item picking, packaging, and shipping.|
|Order tracking||Provides tools to track the location of orders from the time they leave the facility until the time they are received by the customers.|
|Point of sale (POS)||Refers to a physical terminal through which businesses can process payment for goods or services via methods such as credit or debit card (including those with EMV chip security), mobile payment, check, and cash.|
|Purchase order management||Allows businesses to streamline the procurement of goods and services, save purchase orders in a centralized location, make payments for outstanding invoices, and more.|
|Sales orders||Allows users to generate and send confirmation of sale documents to customers using customizable templates. These documents can be sent via email, or through a variety of other communication channels.|
|Kitting||Refers to a process in which similar or related products are bundled, packed, and shipped as a single order. Retail businesses use kitting features to more efficiently bundle products that are related and often combined.|
|Reorder management/replenishment orders||Refers to a capability that lets users set a reorder point (ROP), or optimum stock level, for all items, below which the system triggers an action to reorder that item before it interrupts the supply chain.|
The ability to generate invoices quickly and accurately, make and receive payments on time, and keep track of cash and outstanding invoices all have a big impact on inventory management.
Doing this process manually for one invoice might not seem too bad, but when it comes to managing multiple invoices, it gets complicated. This is where the automation functionalities of an inventory management system can help. Keep reading to learn more.
|Billing and invoicing||Allows users to generate and send bills and invoices for orders placed by customers, store related documents and receipts, track payment history, and more.|
|Credit card processing||Integrates inventory management apps with different payment gateways to accept and process payments through credit, debit, or prepaid cards.|
|Discount management||Allows businesses to set discounts for certain products, generate coupon codes and plan sales, share discount codes with customers, and verify the acceptability of such codes when processing an order.|
|Invoice management||Allows users to digitally process, record, and report invoices.|
|Price management and custom pricing models||Allows businesses to set up different pricing strategies for different sales channels, set dynamic pricing based on demand in the market, and generate new prices when any discount or promotion code is applied.|
|Quote management||Provides tools to process customer requirements and generate custom quotes based on the quantity and specifications requested. Builds and shares quotes using ready-made templates and creates a centralized repository for storing previous quotes.|
Regardless of which inventory management tool you ultimately choose, you should look for something that offers reporting capabilities. Customizable sales reports can help you more efficiently manage your inventory, track current orders, and plan for future orders.
You can also use reporting features to compare data on stock cycles versus stock in warehouse and stores for specific time periods using customized inventory reports.
Some of the most commonly seen monitoring and reporting functionalities offered by inventory management tools are listed below.
|Customizable reporting||View stock quantities and inventory values along with sales and purchase history by store location, time, date, supplier, region, items, and other ad hoc inputs.|
|Real-time analytics||Helps managers collect valuable data from different touch points within their store and analyze it in real time to improve processes, shorten dispatch time, manage inventory, and optimize supply chain flow.|
|Sales analytics||Refers to the process of collecting past sales figures to analyze and understand trends, measure the success of marketing campaigns, identify areas for improvement, and forecast sales for the coming quarter, season, or other period of time.|
|Sales reporting||Refers to the set of tools required to accurately record sales figures both in terms of quantity and monetary value.|
|Sales tracking||Provides visibility into the sales process. Allows businesses to set sales goals for individuals and teams and track progress toward those goals for a given quarter, or other term, to measure success and plan strategic growth.|
|Item attribute management||Tracks specific item attributes such as sizes, colors, or other varieties of similar goods to enable reporting of inventory levels based on attributes.|
If you're running an online business, you must have a solid shipping strategy in place. Delays or errors with shipments can cause frustration with customers and lead to significant costs in time and effort.
Many inventory management tools come equipped with functionalities that help you to streamline your shipping process. See the table below for more information on these capabilities.
|Location tracking/lot traceability||Allows users to track shipments from the time they leave the warehouse to the time they're received by the customer. This is often done through a GPS tracking device or a chip embedded in the delivery vehicle or directly on the product.|
|Returns management||Tracks product returns and manages and monitors all steps involved in the reverse logistics, from potentially picking up a product from the customer to receiving it back in the warehouse and adding it back to stock counts.|
|Shipping labels||Helps print shipping labels and/or identification tags that can be stuck to products or containers that depict the item's source and destination, along with general handling instructions.|
|Shipping management||Aids with all aspects of product deliveries with tools for managing integrations with third-party carriers, calculating shipping rates, printing shipping labels, tracking shipments in progress, managing deliveries, and more.|
Relationship management tools help you maintain good relationships with customers by storing a database of important customer data, as well as all preferences, interactions, and feedback in a central location.
Relationships with vendors and suppliers are equally important. If one of your best-selling products unexpectedly goes out of stock, for example, you'll need to place a rush order with your supplier, which may be more easily done if you have a good relationship to begin with. On the other hand, if you've fallen behind on invoices due to a poor system, they may be hesitant to go out of their way for you.
The most common functions for managing these key relationships can be found in the table below.
|Customer database||A central location where you can store all customer-specific information including names, phone numbers, addresses, order histories, interaction histories, payment information, etc.|
|Supplier management||Enables you to manage key activities on the supply end, including procuring supplies, making payments, managing agreements and contracts, and more.|
|Vendor management||For businesses that sell through an intermediate channel (e.g., wholesalers and distributors), vendor management helps users process and ship orders, generate bills, request payments, and more.|
|Vendor-managed inventory||Helps streamline supply chain operations. Allows a vendor to assume many of the duties of maintaining inventory. Also allows users to set up buyer consignment inventory, automatic replenishment triggers, and maintain a stock of inventory at the user's location.|
Automated integration between your inventory management tool and other apps simplify data management, minimize data transfer errors, reduce manual effort, enhance collaboration, and improve visibility into your supply chain and inventory levels.
Listed below are some of the ways inventory management tools are typically integrated with existing software solutions.
|Accounting integration||With accounting integration capabilities-either through a built-in integrated module or through third-party application integration-users can monitor the flow of financial transactions and generate bills, invoices, and financial reports.|
|API||An API, or application programming interface, is an integration platform that allows businesses to integrate their inventory management solution with third-party applications such as supply chain management, accounting, delivery management, and more.|
|CRM integration||Supports integration with third-party customer relationship management (CRM) solutions to seamlessly transfer customer details and engagement history between applications.|
|Data import/export||Allows users to import and export inventory, sales, and shipping data in various formats such as Excel, CSV, and XLS.|
|Mobile integration||Allows users to access inventory information and perform key warehousing tasks such as inventory control, shipments, payments, etc. from their smartphones through dedicated mobile apps or native mobile browsers.|
|POS integration||Set up a sales terminal or integrate with an active POS system for direct selling to customers, processing of payments, and managing inventory, using one integrated system.|
Explore some additional functionalities that you can expect to find in your inventory management tool below:
|Customizable fields||Allows users within the same organization to customize the fields of a template or a form, so it can be used to collect a information related to product, customer, etc., that is relevant to their role.|
|ECommerce management||Allows integrations with leading eCommerce platforms such as Shopify, Magento, Amazon, eBay, etc. for managing omnichannel, B2C (business to consumer) sales.|
|Multicurrency||Ability to store and display product prices in multiple currencies, update prices as per the real time exchange value, and process orders or make payments in local currencies converted into the dollar equivalent.|
|Retail inventory management||Specific inventory management tool for retailers to manage adequate stock levels across sales channels.|
|Warehouse management||Helps support day-to-day operations in a warehouse including order tracking and labor management.|
This in-depth guide of inventory management software features should get you on your way to choosing the best tool for your business. Here are some additional GetApp resources to help you make an informed decision: