POS system is an all-in-one solution for taking care of different business operations, including Marketing, Reporting, Customer, Staff, or Inventory Management under one roof. Though each function deserves a separate article about the benefits and features they bring, I will focus on inventory management exclusively this time. First, I will demonstrate the benefits and features of the POS system for small business from the inventory management perspective. Next, to help you get started with the IM module, I will explain a quick 3-step process.
IM Features of POS System for Small Business
There exist several features of adequate inventory management function. The ones that I mention below are the most common features that famous POS companies include in their systems. However, depending on which provider you choose to work with, the elements can vary.
One of them is the ease of importing product lists. Some POS software options allow users to import CSV(Comma Separated Values) files of the products that belong to the previous point of sale systems for small business. This feature makes a transfer to a new system fast and prevents data loss.
Another feature of a sound IM module is the possibility of classification. By dividing products or raw materials to different categories, users can easily detect, edit, or bundle items. These classes can be based on colors, size, supplier name, or any other characteristic. Also, sometimes IM function ensures duplication of the objects if they are similar. This process cuts the time for adding new elements to stock.
Easy Ordering in POS System for Small Business
A sophisticated small business POS system also ensures instant contact with partners, such as suppliers. By scanning the barcode or uploading a CSV file, users can send email orders directly to their suppliers. Besides, they can avoid any no-stock issues by using the Autofill function of the IM module. This function automatically creates orders if the quantity of the item drops below the preset level. Other POS systems can also send low-stock alerts to staff members or managers to remind re-ordering.
Additionally, you can control the usage of the IM module. It means, managers or business owners can grant different levels of permissions to users. Let’s say you ordered the high-quantity of new items. Receiving inventory and adding them to the system requires a lot of attention and time, which you might not have. Then you can delegate this task to other employees by restricting their access to sensitive operations. In this way, they can perform the job that you assigned without affecting the other operations.
Users of the POS system for a small business can effortlessly generate reports of inventory for analyzing sales, forecasting, or value estimation. By viewing item-by-item sales data of products, managers can identify the best and worst selling products. It also will help forecast future sales as they already know what goods are preferred more. Plus, managers can add costs of each item to view their profit margins and estimate inventory value.
Professional POS systems also offer an application for mobile devices to manage inventory. People can use their phones as a barcode scanner or for live reporting of stock levels. However, these applications are not typical, and only unique providers may offer you this solution.
Benefits of Inventory Management
Long gone are the days when people manually counted items in inventory. In this process, they lost track of products available and made frequent mistakes. However, inventory management function of the POS system for small business brings many conveniences to storing items.
- Availability Checking - Have you ever wanted to buy an item that was out of stock in a store? Usually, professional staff members immediately look for the availability of that product in another location. If it exists somewhere else, they direct you to that retail store. If you have a multi-store business, Inventory Management is an excellent tool to indicate the availability of items in various locations.
- Accurate Forecasting - Another benefit of the IM module is that it helps to forecast future sales. You can make accurate forecasts based on the data about what was sold most and least during the last period- month, quarter, year. Partially due to this function, your business will be able to supply the best selling products to every customer and avoid low-performing items.
- No Stock Outs - Each stock out is a lost profit for a small business. Plus, it is not only about retail stores. Even in restaurant businesses, it is not desirable to run out of the ingredients, which is essential to cook correctly. Lack of necessary items create delays, dissatisfaction, and lost customers. Inventory Management will notify users about low stock levels.
- Low Storage Costs - When business owners and managers order items, their in-stock time creates costs for proper storage and maintenance. If they do not have much information about customers’ preferences, they can hold goods that will not be sold for a long time. Inventory Management of small business pos system allows users to identify the products with low sales and helps to avoid their re-orders. With no information, users supply items blindly.
How to Start Working with IM?
If you are new to a POS system for small business, you need to follow three steps to put your inventory management into action.
Organize current inventory
One of the mistakes small business owners make is underestimating the power of organizing inventory. Sometimes, they think that their stock level is not as high as the ones belonging to large enterprises. Hence, the exact naming or classification would not create a problem. However, soon, they realize that messy inventory leads to huge issues such as delays in service, human errors, or confusion. Therefore, the first thing you need to do is dividing items into categories based on size, color, supplier ID, etc. Add as much information to description as possible
Create CSV List
As mentioned before, it is quick to integrate inventory information to a new POS system if you have a CSV list. This list is an Excel file where you enter data like Stock Keeping Unit (SKU) ID, product name, description, price, count, order times, etc. Alternatively, users of point of sale systems for small business can enter each item manually, which will make their data prone to human errors.
Also, you will need to set thresholds for receiving low-stock alerts. In this way, you can avoid stock-outs and ensure selling the product to customers whenever they request it. However, the limit for a fast-selling product should not be the same for an item with low sales. Till the time you order a new batch, fast selling goods can be out of stock. Therefore, consider the frequency of purchases and time for re-stocking before setting a notification threshold.
POS systems bring convenience for every aspect of a business, whether it is Marketing or Staff Management. In this post, I specifically focused on the Inventory Management function of the POS system for small business. By explaining its benefits, I believe users will be more stimulated to gather their operations in a POS system. Plus, I shared some standard features that sophisticated POS companies include in their inventory management module. Lastly, considering new or potential users of POS software, I created a quick list of steps users need to perform to start using the IM module immediately without mistakes.