Why using Excel for inventory management may be costing your business time and money

    BY TradeGecko 3 February 2017

    Microsoft Excel has been around since as long as most of us can remember. Whilst the long-running program has seen several upgrades and modifications over the years, the nuts and bolts of this robust spreadsheet system have remained virtually unchanged.

    This fact alone has led many small to medium sized businesses to “stick with it” over the years because in some ways it is a bit like our favorite pair of slippers. It feels comfortable and familiar, and after all, it does the job, doesn’t it?

    For the most basic inventory management needs, yes, Excel will suffice. However, the program does have its limitations especially when it is being used instead of a dedicated inventory management tool. Apart from the many pitfalls that come with anything that is created as a “one system fits all” platform, it has the potential to multiply any user input errors into subsequent entries.

    Save time and money with an industry standard inventory management system

    Business owners already know that time equates to money, and while Excel may provide a workable solution up to a point, as your inventory expands, so will the time your business spends managing it. We have identified 4 key areas where a quality inventory management system will provide what Excel can’t.

    1. Consistent and accurate inventory tracking

    As your business expands, and your stock levels increase along with it, there is one time-consuming metric that is guaranteed to climb the graph. That is data entry errors, due to both the volume of stock and the number of people within the business who actively work the inventory management.

    By switching from Excel to a quality inventory management system, locating, tracking, and calculating everything from single stock items to large quantities will be done at the press of the button. All of this can be carried out without spending valuable business time validating the results of an Excel workbook.

    2. Ease of user access

    Apart from the limits that Excel presents when users need to view more than one workbook or to link between tabs, the program also has the inherent limitation of single user editing (one at a time). In real terms, this means that although several users are able to input data, they are working the program in isolation, further adding to the potential to multiply other user’s errors.

    A proprietary inventory management system deals with this issue through its ability to allow access to all users at any time, from anywhere with an internet connection. The system will also detect and alert users to any issues before they are buried in the data and carried over into the inventory reconciliation.

    3. Working with real-time and historical data

    For all intents and purposes, Excel is a “stand alone” program; this means that it is incapable of providing up-to-the-minute data. Unfortunately, it has to be updated manually to reflect inventory levels from sales and stock inputs. This can be very bad news for any business that deals with the storage and distribution of products, because unused inventory equates to idle money, whilst shortage of stocks leads to unhappy customers.

    Any progressive manager or business owner will appreciate that past trading information plays a crucial part in their future business planning and strategy. With that in mind, access to everything from seasonal trading patterns and individual client ordering levels to the time it takes to reorder raw materials should be a business essential.

    Because an inventory management system has the built in facility to integrate with everything from accounts and sales to ordering and tracking, your business can have instant access to real-time and historical data at the push of a button. Typically, when businesses switch from using Excel to an industry standard inventory management system, one of the most common questions on the owner's minds is how they have managed without it for so long.

    4. The all-important bottom line

    At the risk of sounding glib, we are all in business to make money, so whatever products or systems a business decides to invest in, ROI is always going to be a key factor in the buying process. As an operation expands, so does the amount of product that it handles, and how the inventory is managed has the potential to directly affect every aspect of your business’ finances.

    An inventory management system provides the information that your business needs when it needs it, and it goes a long way towards helping to ensure that your customers remain happy too. The benefits include increased efficiency and cost effectiveness along with controlling cash flowand providing valuable historical and real-time data.

    TradeGecko is inventory and order management software for modern merchants, letting you manage and account for all of your inventory, orders, and customers in . Make the move and take your business to the next level by starting a trial of TradeGecko’s inventory management system today.

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