How should a small business keep track of its inventory?
Decide what counts as stock, count it on a regular schedule, write every count in one place and set a reorder point for items that would stall you if they ran out. A spreadsheet is often enough for one location and one person. Software tends to earn its place when stock sits in several places, several people change it, or items run out before anyone notices.
What to count
Three kinds of stock can be easy to mix up: things you sell, materials you use on jobs, and supplies you run the business on. Track the items that cost real money or stop work when they run short, and leave cheap odds and ends to a glance at the shelf.
Give each tracked item one name, used the same way everywhere, plus a unit (each, box, roll) and a place where it lives. Two names for one item is a common way counts drift apart.
A count habit that works
Count on a schedule, not when someone remembers. Fast-moving items usually deserve a count often and slow ones less often. Write the date and the person beside every count.
When the count differs from the record, write down the difference and a likely reason before changing the number. Over time the reasons can show whether the cause is waste, mistakes or theft. Record items used on a job or sold on the same day when you can, so the record does not depend on memory.
A reorder point in plain terms
A reorder point is the amount at which you order more. A simple version, as general advice: how much you use while you wait for a delivery, plus a small cushion for a late one. If a supplier is slow, the point is higher. After a stockout, consider raising it.
Keep stock tied to your sales and your orders: a sale or a finished job lowers the count, a delivery raises it, and an open order is noted so you do not order twice.
When a spreadsheet is enough
| A spreadsheet is often enough | Software tends to earn its place | |
|---|---|---|
| Places | One shop or one van | Several locations, vans or storerooms |
| People | One person updates it | Several people change stock |
| Running out | You notice in time | Items run out before anyone sees it |
| Sales | A weekly check against sales is enough | You need sales and orders to change counts on their own |
On the first software trial
Ask these before you commit. The related answer on which business tools are worth connecting covers joining it to your invoicing, and the related answer on switching business software covers a later move.
- Can you export everything, in a form you can open, if you leave?
- Can you count on a phone, in the storeroom or truck?
- Can you control who may change numbers, and see who did?
- Does it work with the invoicing or sales tool you already use?
- Is the account in the business's name, with you as owner?
Related answers
- Which of your business tools are worth connecting, and which can stay separate?
- How do you switch business software without losing your data?
Business systems and integrations
Many businesses already pay for the right tools. They just do not talk to each other, so details get typed twice and things fall through. We set them up properly and connect them.