Inventory control is simply the process of tracking the quantity, movement, and value of your products.
In the past 11 years of helping small businesses with inventory, we’ve heard many customers call this process both inventory management and inventory control, so we consider the terms to be interchangeable.
Who is inventory control for?
Inventory control is something that business of all sizes should care about. Smaller businesses of five to ten people might be concerned about tying up too much cash in stock, which can hinder the growth of the company. Larger businesses with hundreds of employees might have more cash to allocate, but it can also be easier to over or under order if your logistics and sales departments aren’t communicating well with one another.
Good inventory control practices in place keeps this from happening at any stage of your growth.
It also doesn’t matter what sector you’re in — if you deal with products, then inventory control is something you need to pay attention to. Ecommerce, retail, and wholesale business have a lot of products moving in and out, or they might even be drop shipping some of the items from warehouses far removed from the office.
All of these inventory movements need to be tracked for the business to function profitably. Anyone who has used FBA (Fulfillment by Amazon) knows this because Amazon actually shows you a dollar figure to represent lost sales when you run out of stock.
Here’s a good inventory of inventory management and control:
What do you need to track?
In order to practice inventory control, you’ll need to track the value and quantity of products going in and out of your business. These divide nicely into three sections:
Purchase and sales orders
Revenue and cost
Inventory movement and stock levels
Improve inventory control with barcode scanning
One of the enemies of inventory control is improper data entry. Typos or other mistakes can occur as you enter inventory movements, and this can make your records stray farther and farther from what’s actually on your shelves.
Adapting barcodes and scanners can help to increase your business’ inventory accuracy by cutting down on data entry. You can tie barcodes directly to items, so that you can scan once instead of typing an entire name out.
If you can cut down a longer item name like EAS400Y-H1 to the single beep of a scanner, you’ll be drastically decreasing the chances of errors during data entry.