Everything SMBs Should Know About Inventory Management

Published 28 May 2024

Whether you’re running a large corporation or a small family business, one thing nearly every company must do is track inventory. It’s a very important, often irritating part of the job if we’re honest; it’s time-consuming, it’s tedious and it’s potentially labor-intensive.

Worst of all, despite our best efforts, those inventory counts never seem to come out accurately. It’s hard to use or sell what you don’t actually have, which can create some serious problems when it comes to meeting customer demands. So many service providers and integrators are spending time and effort on manual systems that are only partially reliable at best. 

Business moves faster than it used to, and when you’re competing against things like Amazon Prime two-day shipping, you can’t afford for your inventory counts to be off. You can’t afford to let inventory go “missing” simply because you have no way to determine who had it last. You also can’t afford to wait two weeks for a reorder after you suddenly discover you ran out of something.

The good news is, with a little help, you can finally fix this problem.

The drawbacks of manual inventory tracking

Fifty years ago, inventory management consisted of walking through the warehouse with a notepad and a pen. It meant counting everything by hand individually, and, depending on the size and fullness of your storage, that could mean tedious tallying for days at a time. 

Of course, teams would try to keep accurate counts every time new shipments came in or inventory was used, but there was no guarantee that either of those counts would be accurate. That meant having to double-check the count by counting everything, again, with no guarantee of accuracy.

What’s more, without any unified system tracking who has what and where everything is, it was very easy for individual items to go “missing,” or even to actually go missing, with no one able (or willing) to account for it.

As a result, teams were sinking countless hours into getting accurate counts, only for those counts to be error-prone, faulty and unreliable. This resulted in several problems, including:

  • Trouble keeping things in stock
  • A sluggish reorder process
  • Disruption of work processes
  • Friction between operations teams and management
  • And, ultimately, disgruntled customers

The worst part? Some companies still use this version of inventory management, despite the fact that there’s a measurably superior alternative.

What is an inventory management software?

Imagine for a moment that you own a smart fridge. Scratch that; imagine for a moment that you own the smartest fridge. When you bring home groceries, you scan the barcode on each item before placing them in the fridge. Then, a display on the front tells you what you have in the fridge, and how much of it there is.

Then imagine that this fridge also tracks who uses the food in the fridge, so that when you find the empty milk carton still inside, you know exactly who finished it and didn’t throw it away. You know who’s eating all the cheese that you keep having to rebuy, and you know that the Granny Smith apples keep going bad because apparently no one but you can tell how delicious they are.

This fridge alerts you when things are running low. Better still, you can set it to reorder food items for you, so that the next package of lunch meat arrives just about the time you’re finishing the previous one. Best of all, as you’re climbing into bed late at night, wondering if there will be enough yogurt for your yogurt and granola breakfast the next day, you can check the levels, and then allocate the yogurt you need so no one else can use it before you.

We’re not sure if such a fridge exists, but we do know a very similar system is available for your business. It’s called an inventory management system, and it’s a real life saver.

Like so many other things, digital systems have made running operations and logistics much easier by offering an automated solution. Inventory management systems take the time, effort and human error out of the difficult task of inventory tracking. This is done by maintaining an electronic record via a single, user-friendly portal—one that automatically updates when inventory is added or used.

Inventory management systems track:
  • Quantities of items you have in stock
  • The location of each item
  • Who is responsible for an item (i.e. if a technician takes an item out on a call)
  • Which and how many items need to be allocated for sales/service/usage
  • Customizable and automatic restock levels
  • And more

That’s it. No strenuous record keeping. Just an inventory tracking system that very nearly manages itself.

Benefits of an inventory management system for service providers and integrators

With an inventory management system, you no longer have to keep track of products or supplies yourself. You can track fluctuations in usage and apply business intelligence and analytics. You can set automatic reorder points, allowing for better “just-in-time” implementation. You’ll have fewer “out of stock” moments, better insight and improved efficiency.

You’ll also have visibility into who’s responsible when items disappear from stock (and will, potentially, be able to differentiate intentional from accidental). You’ll be able to track inventory in multiple locations, so no matter how many trucks, warehouses or cramped storage closest you house your inventory in, you’ll be able to see it all and know where everything is.

It’s how you’ll keep your business running at peak productivity. It’s how you’ll prevent loss. It’s how you’ll stay organized without wasting countless man-hours. Perhaps most importantly, it’s how you’ll keep from disappointing customers because something you offered (or worse, something you promised) is currently unavailable. 

How to implement an inventory management platform

While implementation is something your inventory management software provider should have a proven process for, here are some pointers for those curious about how to do it right:

  • Top-level champions and every one’s buy-in
  • Find the right solution
  • Dedicate time for training to learn the new system
  • Put in place processes for everyone to follow
  • Maintain accuracy (GIGO)
  • Collect data, analyze and make necessary adjustments at regular intervals

First and foremost, for a system like this, you have to have the inventory management software in place before you start collecting the data. It doesn’t really work the other way around. Get the system up and running, then start aggregating your data for it. It’ll be much easier that way.

In order to do that, you’re going to need to find a solution like Rev.io PSA. As you begin the process of getting the solution in place, you’ll want to get buy-in from every level, top to bottom. 

Next, put the system in place, and support it with company processes that encourage its correct and effective use. Just like all computer systems, you get out what you put in, so it’s either Garbage In, Garbage Out (“GIGO” is the technical term), or it’s good data in, good data out. The choice is up to you, really.

Once you do this, you’ll want to monitor and make adjustments to how you use it according to your business' needs. Do checkups at regular intervals regarding usage, accuracy and efficiency, then analyze that data and change or update policies when necessary.

From there, it’s just a matter of being consistent and sticking to proper usage. The system takes care of everything else.

Choosing an inventory management software

Now, how do you find the right inventory management software? First of all, you should use the solution that best fits your use case, regardless of where you find it. Use case and individual needs will vary business to business, so it’s not one-size-fits-all, but there are at least four top features we can recommend as must-haves for any solution you choose:

1. Complete visibility from any location

Inventory isn’t just something for your warehouse manager, service manager or techs to worry about. Your entire team needs access, and they need ways to access outside the office, such as a mobile app or online portal. This is especially important for field techs that leave the office to do their work. An inventory system that won’t let them update on the go will be prone to error, and at risk for loss.

2. Workflow automation

It’s not very easy to be focused and split your focus at the same time, and a lot of things tend to fall through the cracks as a result. Without a way to organize and track everything that needs to be done, and remind team members that it needs doing, productivity can take a serious dive. Workflow automation helps solve this problem by allowing you to input tasks into a central system that tracks everything. It allows you to create unlimited automatic workflows that trigger alerts, such as when stock levels reach a set threshold or when the lifespan of a product reaches a certain age. And it even allows you to automate certain tasks, taking them off the plates of team members. It’s like the world’s most helpful to-do list, and your team will thank you.

3. Easy quoting and invoicing

Your sales and accounting teams both benefit from effective inventory management. Sales will be able to build quicker, more accurate quotes and include discounts that still leave them with a commission and you with a profit. And once a sale is made and/or installation is completed, automatic invoices are sent with detailed, accurate information. Should a customer have a question about a charge, accounting can easily pull the information and address the problem. That is, as long as the solution you choose has the proper functionalities in place.

4. Profitability reporting

Inventory can be a huge financial boom or a bust depending on how effectively it’s managed. Accounting and leadership need accurate, real-time data to calculate inventory value, profit margins and more so they can make informed decisions and, in turn, ensure and increase profitability. Without timely profitability reports, they don’t have any of that.

Effective and efficient inventory management

It’s time to stop wasting your time with an inventory management vehicle that you can’t always trust to get you where you’re going.

Just be sure you get the one you can fit the whole family in. In other words, find a complete business automation solution, one that covers all your needs and not just inventory management. Your business faces a lot of challenges, and business automation software can help solve nearly all of them.

And, if you’d like to learn more about what inventory management is, how it works and what it can do for your business, schedule a Rev.io PSA demo today.

WHAT’S NEW RIGHT NOW?

The latest news, technologies, and resources from Rev.io experts and partners.

How does PSA help grow your MSP business? We compiled a list of the top processes and tools...
It’s been a year since Rev.io acquired Tigerpaw! Here’s all the updates you may have missed about...
Automated back-office processes are vital for MSPs, integrators & telecom resellers. Discover how...
Workflow automation can save your service provider or integrator business both time & money. These...
Learn everything you need to know about telecom billing, including how it works, its benefits, and...
Get a head start on your succession planning journey! This ebook helps ensure a prosperous future...
Learn how to build a predictable revenue model that ensures effective year-over-year growth for...
For service providers and integrators managing inventory, moving beyond manual systems into an...
The new Rev.io PSA Web App revolutionizes professional services automation with cloud-native...
Discover key insights from Cloud Connections 2024 on cloud communications trends, AI integration,...