Your inventory accounting software is only as good as the data within in it. This makes it important to work with a vendor that will migrate existing data when transitioning from an older or introductory system so that your information is accurate and up-to-date. Once you know that the data within your software is reliable, you can use it to your advantage in order to evaluate company health and make strategic decisions. Sophisticated inventory accounting software aids in maintaining the integrity of your data by preventing users from entering bad data such as duplicate inventory product codes and does not allow anything to post to the general ledger if it will cause an imbalance. Proper reporting and data mining can help manage inventory, improve cash flow, predict trends, alert users to anomalies and improve customer relationships. Below we highlight 3 ways in which data can help improve your bottom line.
(1) Customer Preferences and Order Habits
Using historical order data helps categorize customers based on their buying habits. This allows sales reps to create custom profiles for their customers to better meet their customer’s needs and upsell and cross-sell items. The ability to accurately forecast customer demand improves purchasing and helps plan marketing campaigns. Sales and marketing are able to schedule promotions and discounts around information on what product sells best and when.
(2) Sales Channel Behaviour
Do certain products sell better over the phone vs. in-person or online? Understanding how individual sales channels perform will allow you to make informed decisions about how customers interact with your business. One of the benefits of inventory accounting software is that all information is stored in a single database, meaning inventory information is accurate across all sales channels. This allows users to track information to increase sales volume by channel and enables informed decision making on staffing and technology purchases and dictates where to focus marketing efforts. If customers are frequently emailing your team to place an order, consider implementing an online order portal where they can electronically submit orders and view inventory and account information.
(3) Picking, Packing and Shipping Processes
Reporting on data gathered throughout the order process helps improve the time it takes from order to invoice and reduces the amount of errors. It also helps to allocate resources such as staff and technology and can reveal bottlenecks that might affect profitability and customer satisfaction. Consider mapping data such as time from order to shipment, the percentage of customer returns, manual processing costs (such as warehouse labor) and number of picking errors. Look for a software vendor that provides tools to address any opportunities or isuees. For example, if you sell similar items and have a lot of picking errors, implementing wireless barcode scanning will allow warehouse employees to identify and correct errors at the source, reducing the amount of time it takes to get product to customers.
With inventory accounting software, the amount of reporting available is limited only by the data stored within the system. What tools to use to generate reports will depend on the following:
- What information do you want to see?
- How do you want the information to be shown? In a graph/chart? In a text-based document? As a table?
- Where do you want to access the information and how do you want to share the information? Online? Via email?
Your best bet is to work with a vendor that offers a variety of reporting tools in order to get the information the way that makes the most sense for your business.