Inventory is the soul of your business. How you manage it determines the productivity and profitability levels. Essentially, good inventory practice means having the right inventory at the right time and the minimum cost. Inventory is a tied capital.
What this means is that you have invested your cash where they do not earn interest unless when you make a sale. Having a point of sales system is a good start to effective inventory management. The system provides you data for timely decisions eradicating misinformed stock purchase.
Notably, managing your inventories effectively can transform your business. Here are some of the things that will happen as a result of credible inventory management:
i. Zero stock outs
Stock-outs are always a pain in your back. Take it this way: you first go to a store to purchase a product. Only to find a banner informing you it is out of stock. You come back for a second time still nothing has changed. How is the feeling? Definitely, you will assume the store stopped selling the product.
Now imagine this was your store and the product earned you the highest profit margins. Such scenarios can be avoided by ensuring inventory management systems that keep you updated with the current stock levels. Hence, with them, stock-outs will be non-existent in your business.
ii. Proper sales forecasting
Apart from stock-outs, overstocking is the next bitter herbs an entrepreneur can chew. As you know, the stock carries a significant share of your investment. The longer it stays in your premise, the more you incur a cost and probably make losses. For this reason, having the right inventory at the right time is a desire for every business person. In fact, experts advocate for a just-in-time inventory.
A good POS system with inventory management features can be sources of information that will help you in sales forecasting. With it, you can know the high and low demand periods for each item. As such, you will become aware of the quantity of each product to have in your stock at any moment.
iii. Easy analysis of product performance
Stocking some products may be harming your business profitability. However, it is only with reliable inventory management you can identify these products. A POS system plays a crucial role as it has records of each product performance. As such, during your stock taking, you can decide on which products to jack out based on their performance and contribution to your organization profitability.
All in all, effective inventory management is the pillar of your business success. A point of sales system will result in the benefits listed above.