There are many reasons why individuals are not used to keeping an accurate eye on their checking account. Some admit to be too busy to take the time to reconcile the account while others admit that they simply do not understand the need or the process involved. According to a recent FDIC study, consumers pay $17.5 billion dollars every year in overdraft fees.
With an average overdraft of $29, it should be enough to help individuals understand the importance of knowing exactly how much money is in their bank account at all times. Improper management of one’s bank account can lead to hundreds of dollars in charges and declined debit or credit cards for the individual involved.
Management of one’s business inventory is just as important as proper management of a checking account. While some may ask why inventory management is important, successful businesses realize that sales may be lost, shelved items may be misplaced and delays in shipping may cause customers to select a new distributor to purchase their products from. With the right inventory management techniques, these costly problems can be avoided.
1. Settle On a Method of Organization
While some may claim that they simply remember where certain inventory products are located, successful businesses work first to decide what type of storage organization they will use for their inventory. In a warehouse location, this is often done by labelling and numbering the system of shelves.
With inventory that cannot be placed on shelves, such as boxes of fresh fish in a large market warehouse, the organization may be done by breaking the room into sections and providing buyers with a map of what is located in each section. Without a proper starting place for organizing inventory, there is little to no hope of keeping track items.
2. Label, Label, Label
After a method of organization has been established, it is important to find the most effective way to label inventory items. Such labels can be simple hand written stickers with an inventory code that can be recorded and logged as sales are made, or as inventory comes into stock.
Conversely, labels can be machine printed with codes that are built to be read by hand scanners and linked into inventory tracking software. This type of labelling system removes much human error from tracking and managing and inventory system.
Inventory management systems also must have effective ways of counting or measuring inventory. Depending on the types of items that are being dealt with, these measurements may be units, grams, or even pallets.
The actual type of measurement matters much less than the continuity of all items being measured or counted the same way. This continuity serves to ensure that mix ups do not occur because those working to ship inventory misunderstand the counting or measuring method.
4. Make the most of the Best Software
An up to date software system is essential in helping to properly manage inventory. Some may choose to write down the inventory numbers and enter them by hand into the computer. Others prefer to use a handheld scanner to read item labels and import the information directly into their software system.
Just as properly balancing one’s checkbook can help to save money, proper care of inventory can also save money, time, and employee labor. By utilizing proper methods, businesses can ensure that inventory management helps save money and time instead of being too costly.