Best Inventory Management Software

 

What is Inventory Management Software?

Before answering the question, we need to understand what 'Inventory' means and why companies need to manage them using the software. In layman's terms, inventory refers to the raw materials, work-in-progress goods, and final products that businesses put up for sale to generate revenues.

The key to running a successful business is to keep track of inventory and manage it well since there would be no money coming in without it. Stocks and other raw materials must also be ordered judiciously within a firm, too much stock can lead to wastage, and too little stock can halt production. Poor inventory management is one of the main reasons for the failure of small businesses.

Many businesses still maintain their inventory numbers through Excel, which is time-consuming. Though there is a plethora of inventory software available in the market today, 46% of Small and Medium-Sized Businesses (SMBs) still track their inventory manually, leading to frequent re-orders and excessive production, which have a substantial impact on a company's finances.

Inventory Management Software is a utility software that helps retail firms in keeping track of orders, sales, deliveries, and overall inventory levels. Modern inventory management software is also used in the manufacturing industry to create bills of materials, work orders, and other production-related documents. With a good inventory management system, businesses can reduce the efforts and time required for basic tracking of goods and focus on improving efficiencies and analyzing irregularities. 

When do You Need to Use Stock and Inventory Management Software?

While businesses of all sizes that sell physical products require robust warehouse inventory management software, some industries can't ignore the powerful inventory management tools. Let’s look at businesses that can benefit best by using an inventory management system.

1. Food Distribution

   Food distribution businesses cater to the needs of restaurants, schools, supermarkets, and more daily. Keeping an accurate track of the stock and inventory status is essential. Stock maintaining software ensures an accurate inventory management system and forecasts demand levels. 

2. Ecommerce

   E-commerce businesses need to deal with global distribution and round-the-clock order processing, making an effective inventory management system a critical requirement. Inventory management helps eCommerce providers to synchronize their inventory control across multiple channels and get accurate real-time updates and visibility. 

3. Consumer Goods

   Inventory management can pose a challenge for physical retailers in the consumer goods industry. However, well-implemented inventory management tools can help consumer goods providers optimize their inventory management process and improve their supply chains. 

4. Electronic Devices

   Electronic items can be difficult to deal with; individual units cost a few bucks to thousands of dollars. The right inventory management system ensures every phase of the inventory tool is efficiently handled.

What are the Benefits of Inventory Management Software?

As discussed above, there are several advantages of using inventory management software that has made them an essential component of running a business. Here are the reasons why businesses find them useful:

1. Reduced Inaccuracies

Inventory and stock management software contain an array of data handling and management processes that make getting the latest updates much easier. When they are updated manually, there are chances of data duplicity and inaccuracies that can cause a lot of trouble for businesses. Using software reduces the error margin considerably and gives you more accurate data on to base your decisions.

2. Greater Productivity in Operations

Reports and analytics derived from your inventory management software can give you a clearer perception of which items are moving quickly in your business channels and which are not. This helps you in making more intelligent business decisions and provides you with better insights into managing your stocks, especially if you deal with perishable goods. 

3. Customer Satisfaction

Having a decent stock management methodology helps meet client demands in time and anticipate future demand. Thus when your clients demand a product again, you have it ready for them. This not only helps in repeat business but also in overall customer satisfaction and improved brand image.

4. Reducing Manual Work

Manual work is both costly and prone to mistakes. There is usually a lot of data involved, along with complex calculations leading to increased man-hours. Also, one human error can seriously impact the overall calculation. However, with inventory software by your side, you save a great deal of time and manual effort needed for such tasks.

5. Cost-effective

Using inventory management software can also help you avoid overstocking and understocking scenarios by offering more accurate reports. Without them, your business can face substantial revenue losses and unnecessary expenditures. 

Using an inventory management system, you can easily streamline your inventory and eliminate the risk of human mistakes. You can also calculate your safety stock and look at the product sale history to make better purchase decisions. These systems also notify you of low or finished stocks in your warehouses, making sure you never lose a customer.

6. Data Security

Using inventory management software also helps you give every user the required access associated with each level of your inventory chain. You can provide them only the access that they need to manage stocks or monitor them. This makes sure that there are no mistakes, and that your data is always secure.

7. Optimize Profits and Reduce Losses

A well-maintained inventory management system enables you to cut your expenses and maximize profits. The usage of analytics can significantly bring down costs and keep you updated with demand forecasts. This optimization makes sure that you make the most of every opportunity and reduce needless expenditures.

Thus, you can breathe easily, know better, save more, and manage your incoming and outgoing products using a good inventory system.

What are the Key Features of Inventory Management Solutions?

Though there are many inventory tracker software packages available in the market and appear very similar from the outside, there are several distinguishing features that you must check for before making a purchasing decision:

1. Automatic Inventory Restocking

The last thing any manufacturer wants is any of their main components running low during production. You can also miss out on customers if your product is out of stock, making customers choose your competitors. You can avoid both of the above situations by using inventory management software. Most of them can set up automated restock requests once the stocks go below a set limit. This helps you to always be a step ahead and ensure that the business keeps running smoothly.

2. Asset Tracking

Inventory management software can also help you keep track of all your assets in different warehouses. Using a barcode, RFID, or other tracking criteria ensures that you never lose track of your inventory and know where they are at any given time.

3. Product Identification

Another key feature provided by inventory management software is the easy and quick identification of products. Usually done using RFIDs or barcode scanning, these are an effective way to identify products coming in and out inexpensively.

4. Service Management

Beneficial for service-oriented organizations, this software can also help track the cost of all materials used to provide a particular service, helping you create more comprehensive bills of materials and estimate the total cost of a service.

5. Mobile Updates

Another great feature to have in your inventory management system is mobile update functionality. Since smartphones are with us most of the time, allowing timely mobile notifications proves to be a boon for any business, especially when it comes to managing inventory.

What Should be Considered When Purchasing Inventory Management Software?

Picking the best inventory management software for your business can be an easy task if you know what you are looking for. However, before looking for the right tool, you must determine the following:

1. Why do you need the software? What purpose will it serve?
2. What are the features you would be needing?
3. What type of inventory tracker software is ideal for your business type?

After determining the above, you will be able to decide on the following factors before making a purchase:

1. Price

Since inventory software has diversified itself to serve core business functions today, there are packages available in every price range. Using a cloud-based or online inventory management system can make it affordable, but you still need to pick the right plan that solves your business’s problems. Make sure that you do not spend huge sums of money on software features that you rarely use.

2. Integrations

Before you decide on a software package, you need to ensure that it integrates well with your existing system. The inventory management system must be compatible with the software and programs currently used to ensure maximum efficiency.

3. Scalability

Most businesses that purchase inventory management software want to expand themselves in the future. However, if the software you choose does not scale itself according to the organization’s growth, you will need to purchase a new one soon. Hence, it is best to find out the software’s scalability before signing a cheque for it.

4. User-friendliness

The ideal inventory system would make it easy for users to use it and get the work done. If your employees are struggling to operate it or if it requires intense training to master the software, it's time to choose an easier variant. Ensure that the system has a dashboard that is easy to use and helps you maneuver between functions easily.

Types of Stock and Inventory Management Systems

Managing and controlling an inventory system involves integrating all of the organization’s inventory-related tasks such as purchasing, receiving, shipping, warehouse storage, tracking, turnover, and reordering. Today, many inventory software systems empower firms to utilize their resources to the fullest and maximize productivity. However, all such systems can broadly be divided into the following 2methods:

1. Periodic Inventory Management System

Ideal for small organizations, data is entered periodically in this inventory management system. Data is usually entered either monthly, quarterly, or annually for small amounts of products, and the cost of products sold is tallied. Though useful for small-scale operations, there are several drawbacks to this method, mentioned below:

The cost of sold goods has to be estimated during periods where the count is not available. Thus after the complete count, companies have to make significant adjustments.

During periods when the count does not occur, companies are in the dark about the total cost of goods sold, making decision-making difficult.

The system doesn't consider obsolete inventory or scrap losses, which requires the firm to make significant adjustments after the count.

Even with these drawbacks, period inventory management is very popular among small and medium-sized firms as it does not require much investment upfront. Firms that do not have a large cycle count to keep their inventory management practices in check can find this system quite handy.

2. Perpetual Inventory Management System

As the name suggests, this type of inventory management system continuously updates its inventory records. This real-time updation helps the organization get the latest data to make better buying, selling, and procurement decisions, thereby optimizing resources. There is also a whole lot of time and effort saved as there is no manual checking of stocks needed.

However, the perpetual inventory management method requires firms to upgrade their technology and have a robust inventory system in place to make this method work well. Here are a few constraints that this system has:

• These systems require frequent updates depending upon the platform deployment. This makes for costlier downtimes while such upgrades take place.

• This system relies on the use of specialized inventory management software and equipment that adds to business costs.

• The recorded inventory might not always reflect the actual inventory, leading to discrepancies without regular physical inventory counts.

• Errors in improperly scanned goods or stolen goods can influence inventory records, often leading to a mismatch in counting.

Even with its faults, a perpetual inventory management system can provide great insights to large organizations and helps them in optimizing their storage process. They can reduce and take over several manual processes and offer greater data visibility. As tasks get completed, the system gathers the data and metrics and presents them in a dashboard before managers who can then make key decisions based on the insights received.

Inventory management systems can also be classified based on how they identify and demarcate inventory. They are:

1. Radio Frequency Identification Systems (RFID)

As the name suggests, this inventory control system has fixed readers that scan items as they move in or go out of warehouses, and data is added automatically into the system. A recent study suggested that using RFID tagging increases the accuracy of the inventory system from 63% to 95%. Thus several organizations make use of this system to ensure greater accuracy.

2. Barcode Systems

This system is the most widely used inventory management system, mainly due to its simplicity and cost-effectiveness. When employees use barcoding systems to scan stocks, inventory levels get updated in the system simultaneously. Since mobile scanners are primarily used in this process, the process is speedy and allows for prompt reporting and documentation. The probability of errors due to manual entries and stock movement between warehouses reduces significantly.

How Much Does Inventory Software Cost?

Today, most inventory software is hosted online, where you pay a subscription fee each month or annually. Inventory software providers may offer discounts for yearly subscriptions. Standalone inventory tools charge based on the number of orders placed, whereas POS systems with integrated inventory features provide tiered pricing schemes offering more advanced functionality as you increase your level of service.

Inventory management systems range from free to $300 or more per month. Higher-priced plans support companies with high sales volumes and may provide more features, like advanced analytics, integration, or automation tools.

Best Inventory Management Software with Pros and Cons

1. Best Free Option: Zoho Inventory
2. Best for B2B Companies: inFlow
3. Best for Retail Stores: Lightspeed Retail
4. Best Restaurants Inventory Management Software: Upserve
5. Best for Manufacturing: Megaventory
6. Best Overall: Cin7

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Zoho Inventory

Grow your business and streamline your inventory management with Zoho Inventory. Manage multi-channel orders, warehouses, packaging, and shipping, track inventory and integrate with many other applications from a single inventory management software

Pro

1. Free trial Available
2. Multiple shipping options
3. Desktop and mobile apps

Cons

1. Limit Usage on Limited Plan
2. No serial or batch tracking in the free plan
3. Limited integration for accounts

Key features of Zoho Inventory are:

1. Create invoices, bills, and shipping labels from a single application
2. Centralized inventory system for multiple warehouses.
3. Make informed business decisions with our extensive reports.
4. Download the Zoho Inventory iOS application and manage your business on the go
5. Integrate with shipping carriers, payment gateways, accounting, and CRM software in simple steps

InFlow

InFlow Inventory is open-source inventory management software - the easiest way to run your wholesale, distribution, manufacturing, or eCommerce business. Ditch your messy spreadsheets and track your inventory from one app. 

Pro

1. Free trial available without Credit Card
2. Ample setup support
3. A large number of reports

Cons

1. Limited calling support
2. Only integration in Top Plan
3. Some features only available on Windows

Key Features of InFlow are:

1. Track stock and costs across multiple locations
2. Reorder and receive stock with purchase orders
3. Connect to over 35 e-commerce platforms, incl. Shopify and Amazon
4. Create and manage quotes and invoices
5. Pick, pack, and ship your orders from any device
6. Generate and scan barcodes to speed up work

Lightspeed Retail

Lightspeed is one of the best inventory management software for retail businesses that does a lot more than just lets you take payments. It’s built for the day-to-day realities of running a retail business, like managing your inventory, keeping track of your customers, and understanding your store’s sales results.

Pro

1. 14 days trial without Credit Card
2. Nice integration with more than 25 categories

Cons

1. The basic plan lacks an e-commerce function
2. Do not support Android
3. Some features are not fit for small shops

Key Features of Lightspeed are:

1. Run multiple shops at once and solve problems quickly
2. Very little training is required for setup and working
3. Well-designed for the retail industry 
4. Advanced security 
5. Speeds up billing and checkouts

Upserve

Upserve’s automatic tools track your ingredients and costs, with customers reporting a “30% increase in revenue and a 10% drop in time to table on orders”

Pro

1. Barcode Scanner in the app
2. Costing of recipe
3. Real-time Ingredients Inventory deduction

Cons

1. It is expensive
2. Offline can have issues

Key Features of Upserve are:

1. Great for maintaining the activity log reports
2. Monitor all the activities over a single platform
3. It has multi-location sales analytics features
4. Highly laudable as regular assessment helps to improve services
5. Digital email report of the previous day's sales and operation

Megaventory

Megaventory is an online inventory management system for Indian businesses. It can generate amazing inventory reports that are simple and make sense to everyone and supports multiple locations and uses under the same cloud platform.

Pro

1. 15 days Trail for free
2. Easy to use
3. Can handle multiple locations

Cons

1. No app for mobile
2. No telephonic support
3. No Video for Training 

Key Features of Megaventory are:

1. Bulk and quick updating options 
2. Receive automatic stock alerts for materials
3. Allows for user access permissions
4. Tracks customer and vendor contact information
5. Handles dropshipping and consignment sales and purchases

Cin7

Pro

1. Free for Shopify Users
2. 15 days trial without a Credit card
3. Real-time inventory updates

Cons

1. Expensive setup fee (Approx $999)
2. Mobile app only on Google Play

Key Features of Cin7 are:

1. Bulk add, update, or delete products
2. Supports barcode scanning
3. Low-stock and out-of-stock alerts
4. Automated purchase order creation

What are the Latest Trends in Inventory Management Software?

• The market size for inventory management software crossed the USD 3.5 billion mark in 2022 and is expected to grow by 5% every year until 2026.

• The market share for barcode scanning systems grew by 45% in 2022 alone in the US inventory market. 

• Markets like China and Brazil have a huge demand for cloud-based inventory management software. The inventory management software market is expected to grow at a combined average growth rate of 10%.?

Inventory Management Software Related Research Articles:

• Importance of Inventory Management: Definition, Benefits, and Disadvantages

• Inventory Management Techniques & Methods for 2023

• Inventory Management Practices to Streamline Your eCommerce Store

• Tally ERP 9: A Smarter Way to Manage Inventory

• Why Need A Specialized Inventory Management Software?

• Asset Management vs. Inventory Management: Similarities and Differences

• ERP Inventory Management: The Essential Guide

• Signs That Your Salon Needs A Salon Inventory Software

• Top SaaS Software to Help You Manage your Retail Store Inventory

• Manage your Multichannel eCommerce with Inventory Management Software

• Best Inventory Control Systems

• How does An Inventory Control System Assists in Reducing Dead Inventory?

• How to Protect Your Data When Using Inventory Management Software

• What is Just-in-Time (JIT) Inventory? A Detailed Guide with Example