To successfully grow your business, it is essential to manage your inventory stock as accurately and optimally as possible. One way to do this is by using and understanding the right inventory management reports. Accurate, up-to-date and relevant inventory management reports will allow you to discover trends, identify weaknesses and strengths, and fill gaps and inefficiencies. Using these insights, you can take steps to grow profitably while eliminating wasted time and resources. Below are five key inventory management reports that you can use to improve your business now.
Overall inventory performance report
To gain a better understanding of your business health, it is crucial to know how profitable your products are to ensure it is performing at an optimal level. To measure inventory performance, you will need to compare previously collected data. Analyse different metrics such as:- Item fill rate - the percentage of products from a customer’s order your business shipped. The higher the item fill rate is, the better the inventory performance is.
- Inventory accuracy - regular inventory count cycles ensures all stock is accounted for and there is decreased discrepancies with what is recorded and what actually is there.
- Inventory turnover - the number of times inventory stock is replaced in a given period. The higher the rate, the less time inventory stock sits on the shelf.
Inventory control report
Knowing how much inventory stock you have at any given time is critical for a successful business. Inventory control reports will show how much inventory stock you have on hand. Efficiently controlling inventory stock makes sure your valuable capital is being used in the best way possible. You can use one of the following methods:- Stock book - this option is mainly used for a small business with few items. Stock books track inventory manually by entering when inventory comes in and when it goes out. It should not be a long-term solution to inventory management as it is prone to errors and not scalable as the company grows.
- Barcodes - barcodes and RFID tracking allows stock to be tagged and tracked
- Stock on hand - good inventory management software will have a report to show you exactly what stock you have on hand at any given time
Inventory forecasting report
Anticipating the right demand for your product is important for a businesses success. Projecting sales for the future and matching inventory stock levels to meet anticipated demand can ensure you have an optimal amount of product on hand at all times to avoid out-of-stock and overstocking scenarios. Understand the following variables to be able to accurately forecast inventory:- Lead time demand - the time from when you place an order to when the inventory stock arrives
- Safety stock
- Reorder point - know when to order more inventory
ABC analysis report
Knowing what the most and least valuable products are is essential to properly manage your inventory. Conduct an ABC analysis to help inform future reordering decisions.Inventory valuation report
Inventory valuation reports show costs associated with obtaining, holding, transporting inventory, and ensuring inventory stock is in its proper condition to sell. This allows your business to properly measure the cost of inventory on financial statements. To assign costs to inventory stock, use one of the following methods:- Specific identification - tracking the specific cost of individual items of inventory stock
- Weighted average - the average of the costs in the inventory is used. This is what Unleashed Software uses
