Sage 100 can help you regain control over your company’s inventory. If managing inventory feels like trying to corral a runaway herd of elephants, then you know the challenges of managing a busy warehouse. It’s a never-ending task and one that’s critical to your company’s success. Too much of any one product, and you’ve tied up valuable capital … too little of a best-selling product, and you’re missing sales. It’s a never-ending task.
Sage 100 ERP offers you the information that you need to maintain control over your inventory. It’s an integrated system that includes accounting, financial, and many other features to better manage your company’s data and information. With improved insights into stock levels and real-time synchronization of information among your systems, you can tame the inventory beast.
Inventory Control Tip #1: Use and Create Stock Lists
Obviously, you want to sell every product that you manufacture. But sometimes you miscalculate demand for products and they don’t sell well. Some products languish in dark, cobweb-infested corners of the warehouse. It’s easy to keep pushing boxes in front of them and hope they go away, but that won’t help you recoup your investment. You need a plan, and a plan starts with a stock list.
A stock list is a list of products, annual orders, total quantity ordered annually, and the total annual cost of goods sold. When you begin tracking items in this manner, it’s easy to see at a glance what you should keep more of in your warehouse and what should be liquidated.
When you have the cost of goods (COGS) handy, you can come up with logical price points to liquidate stock that isn’t selling well. Stock lists are powerful tools to help you manage your inventory more easily.
Inventory Control Tip #2: Just Get Rid of Old Stock!
Old inventory doesn’t age like fine wine; it ages more like milk, turning sour and less valuable over time (unless you want yogurt, that is). Inventory that doesn’t sell takes up floor space in the warehouse that could be used for other items. It also represents a sunk cost that must be recouped.
Each business must establish its own rules for when inventory should be put on sale to liquidate it. Some companies know that an item may sell infrequently but is a valuable addition to their inventory so they keep it in the warehouse. Others maintain unique products for valued customers. These are special circumstances that require specific methods of handling inventory.
For the most part, any inventory that hasn’t sold in a year should be considered for liquidation. Liquidating stock doesn’t necessarily mean a sale. To reduce unsold inventory, you can:
- Transfer items to a holding warehouse until you can figure out how to sell them.
- Recycle parts or materials into new products.
- Return items to the manufacturer (if you didn’t make them yourself).
- Offer items as an incentive to buy current stock (buy New Widget X and get two Old Widget Ys).
And if that doesn’t work? You have a few more choices. You can donate items in your warehouse to the charity of your choice. Building supplies can be donated to Habitat for Humanity; school supplies, office supplies, and the like can be donated to many groups funding education initiatives. It may take time to explore the many choices you have for donating materials to find the right charity to receive them. Even though you will not get paid for the donation, both the tax write-off and the open floor space freed by removing excess inventory offer benefits to your company.
Inventory Control Tip #3: Organize Stock by Frequent Selling Items
Once you create a stock list, you can use it to re-organize your warehouse. Place items that sell frequently near the pick/pack area or shipping station so that you minimize the steps to move them around the warehouse. By using your stock list to organize the warehouse, you can reduce effort and improve efficiency.
Sage 100 ERP for Better Manufacturing Inventory Management
If you’re ready to move beyond paper-based checklists and into the world of computerized inventory management, Sage has the answer. Sage 100 ERP offers a comprehensive suite of accounting, finance, CRM, human resources, and manufacturing software, including warehouse management to help you improve efficiency and insight into your business. With Sage’s powerful tools, you can measure, monitor, and decide upon inventory matters based on data. It makes inventory management easier.
To learn more about Sage 100, visit Emerald TC. Our experienced team of certified consultants, master developers, and CPAs provides you with a comprehensive team of experts to help you choose and implement the best solution for your business. We are here to help you build and grow your business. Contact us.