With the increase of eCommerce, retailers are being faced with extreme pressure to keep their profit margins healthy. In actual fact, poor inventory management has been a foremost element in why many companies collapse. Appropriate investment in inventory control is a requirement to avoid losses as well as to sustain profitability. This is where the link between sales and inventory control is significant as a business owner can only know the levels of inventory stock which are available if it is known what has been bought as well as what has been sold.
The proper recording of sales allows the business owner to know, for example:
- When inventory stock levels are running low,
- If this should be reordered and, if so, how much needs to be bought.
Precisely recording a sale every time profoundly eases this planning process with the help of a sound inventory management system. This type of system can assist with identifying issues such as under-stocking items in addition to over-stocking items that can directly affect cash flow. In turn, this helps the company owner keep track of the profitability of a business and make decisions about the future of the organisation.
The definition of a sales and inventory management system
The term ‘sales and inventory system’ is a software-based business solution which is utilised to simultaneously track sales activity in addition to inventory. Manufacturers as well as trade resellers can both gain advantages from a thorough solution, where a single transaction entry records required details on the customer, products bought, price and date while also revising inventory levels.
More and more, retail outlets and eCommerce are turning to sales and inventory systems in order to assist them with keeping their finger on the pulse of their business dealings. The demand for this type of software is so great that it is reported that the global retail automation market is anticipated to exceed $275 billion (approximately R3.9 trillion) this year.
What is the objective of a sales and inventory management system?
At the point of a sale (be this face to face or on a website), your business accepts cash or allows payment on account (such as a store cards or a credit card) in exchange for goods. This creates an inflow of cash or revenue in addition to a corresponding outflow of product inventory.
The main objective of an all-encompassing sales and inventory software solution is to optimise efficiency by recording each factor which is involved in the exchange. In days gone by, companies would have to conclude separate record-keeping processes for the income in addition to the inventory change. With a sales and inventory management solution, each factor is coordinated with a single entry in the software program.
As business is done more often on the go, and shoppers are making connections with retailers via handheld devices more frequently, mobile technology is becoming essential for retailers. In fact, 75% of store shoppers make use of their mobile devices while doing their shopping, while 25% of those people make a purchase on their mobile devices while in-store.
Point of sale (POS) retail software can be a way in order to capitalise on the growing popularity of mobile wallets so allowing for contactless payments, reducing the need for countertops, and selling inventory outside of brick-and-mortar locations.
Security in the sales and inventory management system
Security is also a factor that is worth considering for retailers who are wondering what exactly a sales and inventory system is and if the investment makes sense for them. Retailers are all too aware of the reality of data breaches in recent years in addition to how security risks may be hampering their sales. It was found that the recent frequency of security breaches has left nearly one-third of buyers feeling reluctant to make purchases both in-store and online. Sales and inventory systems, however, can improve security by using multi-level encryption, password-restricted access in addition to tokenised credit card processing and other high-tech protection features.
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