Keep track of your inventory

Are you constantly running out of stock and struggling to meet customer's orders in time? Or maybe your stock shelves are too full while consumer's tastes are changing. As a business owner, it is important to manage your inventory to meet your orders and control costs.

What is inventory or stock?

Inventory, also known as stock, are assets in your business that you:

1. sell (e.g. food products for your supermarket)

2. use as materials to make the products you sell (e.g. wood you use to make furniture for your furniture factory)

3. use in order to produce your service (e.g. shampoo for your hairdressing parlour).

Sometimes it is confusing to set inventory apart from other business assets.

For example:

A car that is being sold in a car yard will be part of the car yard's inventory. However, a car that is used in a delivery service is not considered part of its inventory.

Why is it important to manage your inventory?

An effective inventory management system can help you to:

1. decrease your costs, e.g. costs of storing your inventory

2. control costs, e.g. waste and discarded items of stock

3. adjust your stock to latest trends and business conditions

4. manage your cash-flow more efficiently by reducing money tied in capital

5. maintain relationships with suppliers and customers.

What is the best way to manage inventory?

Here are some tips to help you manage your inventory effectively:

1. Know your product cycle, trends and associated market conditions- this will make it easier to manage and order stock. Find out from the Australian Bureau of Statistics app about market conditions in your industry.

2. Understand your suppliers' and customers' expectations - things like supplier deadlines and delays can impact your inventory.

3. Decide what you're going to use as an inventory management system.