Inventory or stock may include finished and unfinished goods, the raw materials used in the production of goods, and consumables such as fuel, paper, or pens. Efficient stock control is the key to small business inventory management, ensuring that adequate stock levels are maintained across different types of inventory items, minimising stock management costs, improving inventory tracking, and preventing tied-up capital on overstock. Here are the essential stock control methods that can be used for small business inventory management.
- Minimum stock level — You set a minimum stock level for every inventory item and then place an order for that item when that level is reached. This method prevents overstocking but can lead to high shipment costs if stock items are ordered individually and not in batches.
- Just In Time (JIT) — Stock is delivered when needed and for immediate use. This inventory control technique keeps inventory to a minimum to lower costs, but can lead to out-of-stock problems if suppliers aren’t able to deliver the necessary products on time.
- Stock review — You review stock weekly, monthly, or at set intervals and place new orders to replenish it. This may require more time than the other techniques, and also poses the risk that certain stock quantities may deplete before the review occurs.
When it comes to small business inventory management, these essential inventory control techniques can be carried out manually, using spreadsheets and manual inputting, through computer software, or through cloud-based inventory control apps that run in Web browsers and can be accessed from any location, and may also work on mobile devices, such as the QuickBooks online inventory management app. Such applications make inventory control a more streamlined process, eliminate human errors, and increase productivity, taking your small business inventory management to another level.