“Now where did I leave that inventory?” you wonder as you wander through your warehouse dazedly. That scenario is a bit dramatic, but it can feel that way when you discover your inventory numbers are incorrect. Properly tracking inventory usage and variance is key to making the most out of your products. Fortunately, it does not have to be as difficult as it appears. We’ve put together a comprehensive guide that can help you understand the basics of an inventory tracker system, including some free software you can use for your small business and a sheet to help you through the process. Without further ado, let’s proceed!
What is an Inventory Tracker?
Inventory tracking, as the name implies, refers to the tracking of stock levels throughout the operations of a business. These are constantly changing as customers make purchases and new stock is brought in, whether to replace items sold to those customers or to anticipate changing demand patterns.
If you own a retail business, whether large or small, your most important responsibility is to keep the right stock in the right quantities—and to do so, you need an accurate inventory tracker system as part of your stock management system.
There are two reasons why inventory tracking is so important. The first is satisfying consumer demand, and the second is the amount of money at stake. Businesses must streamline inventory management to ensure that customers can find the right products and that businesses do not waste money on excess inventory.
Bigger businesses can devote more resources to warehouse management and inventory control. Some even have specific departments concentrating entirely on this work. This is obviously a less viable option for smaller businesses. Nonetheless, tools like inventory tracking software can assist these small businesses in managing warehousing, fulfillment, and other tasks.
The Benefits of Tracking Inventory
Inventory tracking has numerous advantages because real-time inventory levels have a direct impact on your warehousing and sales operations. The top three are as follows:
#1. You will be able to make informed product ordering decisions.
Calculating optimal reorder points, performing demand planning and forecasting, and more are all made easier when you have insight into inventory levels and movement. As a result, the ability to increase sales and maximize profits improves.
#2. You’ll save money across the board.
When your inventory is under control, you can save money on storage, goods transfer, purchasing, and employee salaries. With less money set aside for inventory, you can invest it in eCommerce marketing to boost sales and expand your business.
#3. Your warehouse staff will appreciate having insight into your exact inventory levels and locations.
They will be more productive if they have more information. If you haven’t already, you should start using warehouse management software. Order fulfillment speed is also increased, and your staff will spend less time looking for missing items or sorting through a large amount of inventory. This also leads to more satisfied customers.
The Challenges of Tracking Inventory
While the advantages of inventory tracking speak for themselves, it’s also important to be aware of the drawbacks. Understanding these challenges is critical because it can help businesses avoid becoming victims of them.
#1. It’s time-consuming
Although we mentioned earlier that inventory tracking can help businesses save time, effort, and money, it’s worth noting here that inventory management can be time-consuming in and of itself. It becomes more complex as businesses expand into new channels and sales increase, which means there is more to analyze and track.
It goes without saying that retail entrepreneurs have an abundance of time demands. Multichannel retailers have a lot on their plates, whether it’s hiring and training new employees, running marketing campaigns, or looking for new business opportunities. Inventory management is an additional responsibility on top of everything else.
#2. It is not always easy to keep track of items.
Another issue with inventory tracking is that orders frequently move from one location to another. It’s not as simple as storing them all in one warehouse until customers require them. Items may be moved from one location to another before reaching a consumer.
As items are moved from one location to another, it becomes increasingly difficult to keep track of where they are and how many there are. This can have negative consequences. It specifically implies that there is a risk of inventory shrinkage (due to loss or theft, for example), unfulfilled or late orders, and inaccurate financial records.
#3. Larger inventories are more difficult to manage.
We’ve already mentioned it, but larger inventories are more difficult to manage. Obviously, ambitious entrepreneurs are always looking for ways to expand. But as sales increase, so will inventory turnover, and managing this is undeniably tricky.
You may find yourself carrying multiple variants of the same product type, so the task here is to keep track of all of these – in all of their various sizes, colors, styles, and so on. As well as managing their pricing, while ensuring that your business has enough of each to meet customer demand. Scaling up inventory tracking is thus one of the most difficult challenges for growing businesses to overcome.
How do you Effectively Track Inventory?
Inventory tracking methods vary, with some being more effective than others. Let’s take a look at a few of them.
#1. Pen and paper
Some businesses (typically older, smaller ones) continue to use manual pen-and-paper methods, writing down the details of each transaction on a card system. However, this is clearly a suboptimal method, and the majority of businesses have long since abandoned such practices.
#2. Excel spreadsheets
To keep track of inventory, some businesses simply use Excel spreadsheets. This is okay for small companies dealing with very low order volumes, but it is likely to prove inadequate even for medium-sized businesses. As your company grows, you’ll likely discover that these spreadsheets are no longer adequate.
#3. Google Sheet inventory tracker
Although spreadsheets are an improvement over paper copies, information must still be entered manually. However, if you use Google Sheet, you can automatically update your inventory tracker whenever it changes.
#4. Third-party logistics
Another option is to outsource order fulfillment to a third-party logistics company, which will handle the entire process. Because these companies handle your orders, they are also in charge of your inventory, packing, and shipping orders to customers. They can also provide detailed, real-time inventory reports and keep precise inventory levels in check.
#5. Mobile apps
Many businesses (including many small startups) are increasingly using iOS and Android apps instead of a spreadsheet as inventory tracker. However, as businesses grow and their needs become more complex, these apps can become somewhat limiting.
#6. Inventory tracking software
Inventory tracking software provides a much more detailed picture of inventory. As orders are processed, warehouse workers can scan 2D barcode labels, providing an instant record of which items are in stock, which are running low, and which are overstocked. This is just one example of how automation is making life easier for both businesses and their employees.
Best Free Inventory Tracker Software 2023
Free inventory software can provide a cost-effective way for small businesses to manage their inventory. However, you get what you pay for. These inventory tracker systems are typically feature-light, so when looking for the right software, ensure that it at the very least supports your current operations. We have chosen a few for you to use. They are as follows:
#1. Odoo
Odoo, a completely open-source inventory system, is the best free inventory management software because it does so much, including automated purchase orders (POs) and expiry date tracking. It’s completely unlimited, making it great for small businesses with huge inventories, and for a small fee, you can tie it to Odoo’s dozen other sales and marketing tools. Odoo also integrates with ecommerce systems.
#2. Zoho
Zoho Inventory, designed for small to medium-sized businesses, assists businesses in managing sales, creating purchase orders, and accurately tracking inventory. It integrates with a number of online marketplaces, including Amazon, Etsy, and eBay. It also supports Shopify and is available on all platforms. This version is free and comes with 20 online and offline orders, 20 shipping labels, 20 shipment tracking, and one warehouse. It includes inventory and warehouse management, multichannel selling, reporting, and other features.
#3. SalesBinder
SalesBinder provides excellent inventory software that works in over 130 countries and multiple currencies. Its user-friendly interface also allows for extensive customization, allowing you to make it work exactly how you need it to, no matter where you are in the world. SalesBinder’s free plan does not support integrations; instead, consider Zoho or Odoo. Its free plan also restricts the number of monthly records it counts as inventory items, accounts, or orders—no other inventory tracker system on our list does this for either a small business or a large firm. It does, however, have robust inventory recording and tracking features, as well as strong sales and CRM features.
#4. Sortly
Sortly is a cloud-based inventory management platform that includes features such as activity tracking, multilocation tracking, barcoding, and audit trails. Its most notable feature, however, is its built-in barcode and QR scanner mobile app, which works even when the device is turned off. Even if your phone app isn’t receiving a signal, you can scan incoming and outgoing inventory—Sortly will sync automatically once you’re back online. Sortly is ideal for on-the-go inventory management across multiple locations due to its offline capabilities and multilocation tracking. While Zoho’s mobile app has an offline mode, Sortly offers inventory for multiple locations.
#5. Square
Square is best known for its point-of-sale (POS) capabilities for retailers and restaurants, and it ranks near the top of our lists of the best POS systems and leading free POS systems. However, it also includes Square’s inventory management tools completely for free for up to 300 locations. Given all of the features that Square accounts include—in-store sales, ecommerce integrations, mobile capabilities, and POS—it is the best all-in-one solution for retailers looking to manage inventory for free and sell in-store, online, via invoice, and mobile.
Read Also: INVENTORY TRACKING SYSTEM: Best Practices
How to Choose Free Inventory Management Software
To determine which free inventory software is the best fit for your company’s needs, consider the following factors and weigh them in the context of your business.
#1. Multi-channel management
If you own a small business or a big firm with a retail store and also an online store, you’ll need a free inventory tracking system that syncs inventory from both locations. It should integrate with your POS and e-commerce software to accomplish this. Square, for example, is a good free inventory solution for this, but Stockpile by Canvus is not.
#2. Additional integrations
If your accounting software includes inventory reports, it may be worthwhile to choose a free inventory app that integrates with it. This eliminates the need to subscribe to a paid inventory management plan in order to access advanced reporting. There are additional reasons why your accounting software and inventory software should be linked: Inventory tracker is classified as an asset on your balance sheet.
#3. The number of users
How many people will need access to your inventory management app? Free software frequently has a small user limit, sometimes allowing only one user. Include yourself, anyone filling or counting inventory, and possibly even your accountant.
#4. Budget
Free inventory tracker software is affordable for any small or big business. But if a slightly more expensive inventory tracker system saves you time that would otherwise be spent manually tracking your inventory — or prevents costly mistakes in ordering or tracking items — it may be worth the price in the long run.
#5. Features
Free inventory tracker system for either small business or big firms typically includes fewer features than paid options, such as basic reporting, low stock alerts, some digital labeling and scanning capabilities, and mobile functionality.
What is the best way to Track Inventory?
The most basic method of inventory tracking is to manually count your inventory every two weeks and compare the numbers to sales. This is referred to as periodic inventory. There is also perpetual inventory, which uses inventory management systems that are integrated into your company’s POS.
How can I Keep Track of my Inventory for Free?
Pen and paper, an inventory tracker spreadsheet, or free inventory management software can all be used to keep track of inventory for free. You can go with anyone that suits you.
Can Excel be used to Track Inventory?
Excel is a low-cost free inventory tracker system for either small businesses or a big corporations, but it has limitations (and room for error) that inventory management software does not. A spreadsheet has virtually infinite columns for categorizing and sorting the information you require.
What are the Three Methods of Tracking Inventory?
The push technique, pull technique, and just-in-time technique are the three most popular inventory management techniques.
What are the two Methods of Tracking Inventory?
There are two approaches: the traditional method of manually tracking and recording the flow of goods into and out of your business, or the more practical automated approach using technology.
What are the Types of Inventory Tracking Systems?
Inventory management systems are classified into three types: manual, periodic, and perpetual.
Why Should you Track Inventory?
Keeping track of your inventory can help you avoid inventory errors and inefficiencies. Keeping careful track of the goods your company has in stock can help you increase profits and operate more efficiently.
Conclusion
Tracking inventory is one of the most important parts of running a successful business. A wise inventory manager, warehouse manager, or business owner will perform a complete inventory at least quarterly and use data from physical or perpetual inventories to improve their inventory management practices (see inventory control manager salary and warehouse manager salary).
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