February 13, 2020

Top 5 Inventory Methods for your Small Business

Naveen Shayan

LedgerMax specialist

A significant element to consider while managing your small business is the strength and competence to handle your inventory. Appropriate inventory management can help you in refraining from lost sales caused by having insufficient inventory or lessen the expense correlated with having excessive inventory. Thus, while picking an inventory system, keep in mind the factors like the sales and size of your business along with your capability to keep authentic records.

1. Computerized Inventory Method

Above all, if you're using an accounting software like LedgerMax for maintaining your business records and managing your inventory, then you have to just sit back and relax because it will literally do everything for you in a very precise manner. It will keep track of the entire process; from ordering an item until it gets sold plus it will also alert you to reorder when an item is about to finish. Other than this, it will also help you by generating reports which are crucial for your inventory management.Summing up, all the five inventory methods mentioned above can be used to control your inventory; however computerized inventory methods always take the lead as they are accurate and systematized. LedgerMax is one such accounting software that provides accounting solutions to small to medium sized enterprises.

2. Tags Inventory Method

The tags inventory method is comprised of putting a tag on every stocked item in your inventory. Therefore, when a product is sold, you just take off the tag and put it aside. When the day ends, you can mark your sales on any of the above mentioned inventory management method.

3. Tickler Inventory Method

In this method, you have to divide your inventory items into different segments. You are required to check and count the segments every day. In this way you'll be able to identify the increase or decrease in the sales of a certain product through every interval.

4. Tick Sheet Inventory Method

In a tick sheet inventory method, you're required to initiate by listing all your inventory items in addition to the quantity that has to be sold before you reorder. All you have to do is simply put a tick on the sold item after every sale takes place. Thus, when your item gets to the point of reordering, its time to place your next order for the required item. However, it is important to check on the minimum order quantity restriction from your distributor to bypass any additional shipping cost.

5. Visual Inventory Method

Small business owners sometimes choose visual inventory method for inventory management. For very small businesses, where the owner knows the exact quantity of each item being sold on a said day, counting is not even that essential. The visual inventory method is also suitable for you if your business primarily involves selling items purchased by customers on certain occasions.


Our Featured Blog Posts

November 3, 2022
The significance of supply change management for a business is massive. It is a vastly comprehensive system that all organizations use in order to put up their products; starting from acquiring raw materials, processing them and finally delivering the end product to the consumer. Thus, an efficient supply chain is all about improving the functionality of operations and making them more well-organized and swift.
Read more
October 4, 2022
There isn’t any business that doesn’t need cash. As a small business owner, you must be aware of the significance of having an adequate amount of rupees in hand. Irrespective of the profits your business is making, if the cash is occupied in any way, be it pending receivables or excessive inventory, the money is worthless. In contrast, when you maintain a strong cash flow for your business, it lets you fulfill your financial duties effortlessly and the resilience it needs to rise with more opportunities. In short, you won’t have to think before saying YES to any new venture that comes in your way.
Read more
September 1, 2022
Also known as a delivery note, a GRN (Goods Received Note) is a significant document which is used by the accounts division to authenticate invoices prior to settling the payments. The accounts department relies on the GRN made by the stores division to scrutinize if all the ordered products are delivered by the supplier and then settle the supplier’s payments for the said goods.
Read more