Although point of sale technology is now more commonly used in small businesses, it’s amazing how many retailers are still missing the boat on this opportunity.
You’ve spent all of that time researching the many systems available in the market, made the financial investment on the system that you eventually selected, yet are not making the most of the POS software. Inventory is one of those things that retailers often miss the mark on. Granted, most small businesses that use point of sale systems track their inventory to some extent, but very few retailers are taking full advantage of the capabilities of their system with respect to inventory.
Here are 5 ways that your POS system can help with inventory management:
Creating Purchase Orders
It’s interesting – you would assume that everyone would automatically think to use the inventory reports from their POS system to decide which items and how much they should put on their next purchase order to their suppliers. However, it’s amazing how many small business owners are not doing this and are individually hand-writing everything on their order. A good POS system should allow you to enter in a desired quantity or a minimum number for each item. So when it comes time to order more inventory, you should be able to easily eyeball your report and see how far you are from your minimum trigger and what your normal recommended order amount is. You not only save time with this method, but you also ensure accuracy and make advised decisions with the data.
Tracking your top selling items should be considered a must for running a good business. This data is necessary because it dictates what you should be pushing more to your customers, what should be displayed more prominently in your store, and which items you need to have in stock and how much. It’s imperative that you always have enough of these items in stock to maximize revenue, and you’re doing yourself a major disservice if you’re not utilizing your POS software to determine this.
Just like it’s important to know what your top sellers are, it’s a great practice to monitor which items you are losing sales on the most. In relation to inventory control, what this means is knowing how often you’re losing a sale because you don’t have a particular item in stock. How often are you turning away a potential customer because you don’t have any more of the specific item that they’re seeking? This is something that the majority of large retailers track but small businesses tend to overlook.
Setting Inventory Levels Based on Sales History
When you’re setting your inventory stock levels in your POS system, you should be basing them directly off of your sales history. This sounds like a no brainer but it’s shocking how many business owners still use their intuition and not real data. The fact is that if you’re estimating, you’re almost surely tying too much cash to your inventory and likely not properly allocating it to your highest revenue generators.
Reconciling inventory is one of the most onerous tasks that a small business owner has to go through. It’s the process of ensuring that the inventory in your records matches the physical quantity in your store. Before POS systems, this was a completely manual process. You had to first ensure that all of your written records were correct and then walk through the store counting the amount of each product and marking it off on your sheet of paper.
With your POS software, it’s much easier to maintain accuracy across all platforms. When you receive the items that you’ve ordered from your suppliers, check that the amount listed on the purchase order matches the number received and that it also matches the amount on your POS reports as the recommended order that you’ve previously set. This will help keep your inventory accurate on your POS system and reduce your costs as a result.
All of these tips should help you save money. But your POS software should also help you save a significant amount of time. Feel free to share any other POS Inventory best practices in the comments section below.