How Growing Companies Lose Control of Inventory

Automate warehouse operations to remain efficient, competitive and profitable.

Millions of companies get off the ground using basic accounting software like Sage 50, BusinessWorks or QuickBooks.  And why not...it's affordable, relatively easy to use, and you can get up and running quickly.

But companies that are in growth mode almost always reach a point where their basic accounting software is no longer keeping pace with the constant changes and added complexity in operations.

And if your business carries inventory, the epicenter for this problem hits smack dab in your warehouse!

In this article, we take a look at how companies lose control of inventory and what they can do to get it back.

You Have Too Much Inventory to Track Manually

In the beginning, you had a few employees and a manageable amount of inventory.  Your warehouse wasn't a picture of efficiency.  But it was enough to get by and keep product moving out the door.

But a few years later, business has really taken off, your warehouse is expanding, your staff has grown, and you've got more inventory than you can keep track of.  Your basic accounting software combined with hand-written notes and Excel spreadsheets no longer cuts it.

As a business grows, they almost always need to automate more of their warehouse operations in order to remain efficient, competitive, and profitable.

That's where the advanced inventory functionality of a true ERP system provides things like serialized inventory, automated shipping and receiving, bar code scanning, and other technology that provides the competitive edge you need to continue your company's upward trajectory.

You Have More Than One Warehouse

A small team working at a single warehouse can often get by without a fully automated inventory system because they're close enough to the action.  But as soon as you take on an additional warehouse or two, your inventory data has to be synchronized in real-time across multiple locations.

Without a system that can manage inventory at multiple locations, you run the risk of promising delivery on customer orders that you often can't fulfill.  You thought you had stock available in the other warehouse - but that inventory was sold earlier in the week and the updated report hasn't reached your location yet.  Those mistakes can damage customer relations and the potential for future orders.

Simply put, you can't afford to wait until the end of the week to get the inventory updates you need.  In a competitive industry, consolidated inventory systems with up-to-the-minute reporting can make the difference between thriving and barely surviving.

You're Entering the Same Data In Multiple Systems

A warehouse is a complex operation that often requires more than just one single software system.  Even the best ERP systems need to communicate with other software applications to keep your warehouse running smoothly.

One of the most common is the use of shipping applications from UPS and FedEx.  A lot of businesses end up entering the same data in multiple systems.  Once in the ordering and inventory system, another entry to transfer that info into the UPS or FedEx shipping software and often a third time to get shipment dates and tracking info back into the accounting software.  You probably already know that this process is tedious, time-consuming, costly, and opens up plenty of opportunity for errors.

Most full-featured ERP systems, like Sage 100 can integrate directly into an automated shipping application so that the data moves freely, back and forth, from one system to the other without any added data entry or extra work.  It's fast, efficient, and accurate.

You Hit the Data Limit

Because Intuit's own website provides information about limitations on the number of inventory items that can be tracked in QuickBooks, this challenge is pretty easy to identify.  Once you've hit the limit on the number of records QuickBooks can accommodate, you can no longer enter new data.

But even before you hit the technical limits, things aren't always peaches and cream.  As you add more transactions and inventory data, you'll start to experience software that slows to a crawl and even freezes up without warning.  As you approach the database limitations, transactions take longer to process, reports are slow to generate, and your system becomes unstable.

It's not hard to see that at some point, your software is hurting warehouse productivity and bloated labor costs are eating into your profit margins.

You Manage Inventory Outside The System

As a result of all the problems mentioned above, many companies reach a stage where employees are relying on spreadsheets more than they're using the accounting and inventory software.  In short, they're trying to shore up functional shortcomings in the software by using their own home-grown spreadsheets and inventory tracking methods.

Before long, these spreadsheets begin to take on a life of their own and the company to get a handle on growing volumes of data scattered across multiple systems, spreadsheets, and file cabinets.  Under this scattered and disconnected system, your inventory reports quickly become inaccurate, out of date and unreliable.

Have You Lost Control of Inventory?

If your company is in growth mode and suffering from any of these inventory control problems, you'll need a knowledgeable technology consultant and business software provider to help find an ERP solution that fits your business.

At DWD, we help companies move up from Sage 50, BusinessWorks or QuickBooks and move on with their business.  Get in touch and find out how we can help.