Are you looking for free inventory management software? We are here to help you with all the relevant information you need to know.
What is Inventory?
To know how to manage inventory, first of all, you must know what inventory is.
Inventory is the amount of stock to be ordered or held for sale. The term is often associated with the sale or purchase of goods, but a company can have inventory even if they do not sell anything. If a company has goods that are not immediately consumable, it is necessary to hold them for sale in the future.
In an inventory-based business, the stock is tracked and managed based on the time left to sell each product. The inventory is the stock of materials, equipment, items and components. Demand, economic scale, uncertainty, inflation are some reasons companies need to maintain inventory.
Types of Inventory
There are 12 types of inventory
- Raw Material
- Finished Goods
- Work in Progress
- MRO Goods
- Packing Materials
- Safety Stock
- Decoupled Inventory
- Cycle Inventory
- Service Inventory
- Anticipated Inventory
- Transit Inventory
- Book Inventory
What is Inventory Management?
Inventory management is essential for the managers to know the inventory of the organization, so they can manage it effectively. Inventory management is a form of business process management (BPM) that focuses on the storage and control of assets and resources.
Inventory management is about efficiently storing assets and resources, including goods, services, materials, information, money, and people. An inventory system is a database with the data stored.
The inventory data is typically maintained to help control and optimize the use of resources, control costs, comply with standards, and ensure the availability and quality of the goods and services.
Inventory Management- its Importance
The importance of inventory management is to control the distribution and purchasing of materials. Without management, the company will be unable to keep track of how much materials are used and purchased and how much of the materials are unused.
The company must be able to track how much each item costs, how long it takes to obtain the material, how much the company has spent on each item, where the material is stored, how much the amount of material can hold, how much of the materials are currently being used and when and how the materials will be used. Inventory management also requires the company to be able to store the materials.
How Does Inventory Management Work?
Inventory management is a type of inventory control. This implies that the aim of the inventory management system is to ensure that the right products are available at the right time in the right place.
It also involves the monitoring of the physical and financial status of an organization. This allows managers to make accurate projections about the future inventory requirements of the company and adjust the current inventory level in an effort to minimize financial risk.
Techniques of Inventory Management
There are various techniques followed to maintain good inventory management:
- Highest In First Out (HIFO)system
- First In First Out (FIFO) system
- Last In First Out (LIFO) system
- ABC Analysis
- Economic Order Quantity(EOQ)
- Just-In-Time Inventory
- Demand Forecasting
- Perpetual Inventory Management
- Safety Stock
- Reorder Point Formula
- Bulk Shipments
Types of Inventory Management
It might appear to the un-expert that inventories are a simple process that can be easily managed. This is a myth. In reality, it is a complex process that should be treated with the same seriousness that the management of a large firm would be treated.
It is for this reason that the development of an inventory management system is such a critical process. For this some methods have been introduced:
- Perpetual Inventory Management- it means maintaining up to date data of the inventory in real-time. The item is recorded every time at every stage of the process.
- Periodic Inventory Management- in this the changes in the inventory are calculated on the number of sales and items recorded in the given period.
- Maintenance, Repair and Operations Management- it is used to track the business assets and their condition.
- Manual Inventory Management- in this the data is recorded physically on spreadsheets and then the items are counted.
Advantage of Inventory Management
- Maximizes gain and minimizes cost incurred
- Satisfactory results to customers
- Smooth flow of goods
- Productive changes in employees
What is the Inventory Management Process?
The inventory management process means managing the inventory of a business. It includes the processes of planning, buying, storing, ordering, receiving, processing, shipping, invoicing, accounting and controlling all these processes.
The inventory management process is used to manage the inventory of a business to make sure that the inventory is sufficient to meet the business needs. It is often known as inventory control or inventory accounting.
The inventory management process is a set of actions that an organization must take to ensure that all necessary information is gathered, stored, and tracked throughout the process of inventory.
The information gathered is then used to create a complete inventory list of the items in the inventory. The information is then used to monitor inventory as it moves through the various processes of production, transportation, and ultimately to the point of delivery to its ultimate destination.
The objective of the inventory management process is to manage and control the amount, location, condition, and other pertinent information related to all of the inventory held by the organization in the form of raw materials, parts, or parts of goods to be sold in the market.
Inventory management is the efficient and cost-effective purchase, storage, and distribution of a firm’s finished goods and raw materials. The Inventory Management Process consists of three main components:
Inventory Forecast Analytics
Inventory Forecast Analytics is a statistical process for predicting future inventory levels of goods and services. It is important to correctly predict and analyze the need for inventory. Without a powerful analysis, it may cost the business as decisions are merely based on instincts.
Optimized Purchase Orders
Managing the need for inventory can be hectic. In case you didn’t know, there are multiple types of purchase orders and each has a different format. Thus it is easier to use an app like LIO for future purchase orders.
That’s because Lio can help you create automated purchase orders, in turn, saving you tons of hours a week leaving you time to focus on customer satisfaction and scaling your business.
Inventory control is a process that involves the identification, quantification and monitoring of all components, raw materials and finished goods in a company’s inventory.
It is one of the most important functions of an inventory management system, and the systems that perform this function vary in complexity and sophistication based on the specific needs of the enterprise. Manual control is time-consuming and the strategies applied may be complex to follow, so the application like LIO comes as a rescuer.
Inventory Management Softwares and Systems
Inventory management systems were first used for commercial purposes in the 1970s. In those days, companies were trying to maximize their stock inventory in order to minimize the amount of money they had to spend and/or wait for.
Later, they started to use the same inventory management systems to manage their customer’s inventories, which in turn gave them the idea of implementing an inventory management software for their customer’s inventories.
The first type of inventory management software was developed in the early 1990s and was referred to as electronic warehouse management systems (EWMS) for inventory management.
Inventory management software is used to help keep track of and organize inventory in a business. This software can be used to help manage both physical and virtual inventory in a business.
Inventory management software can be applied to all types of businesses but is most commonly used in the retail and wholesale industry. In these industries, inventory management software is used to manage the physical stock of products and the demand for products.
Purpose of Inventory Management Software
The purpose of inventory management software is to help the organization manage all its stock items and be able to keep track of how much of each one is held.
Many businesses are making use of technology to simplify the way they manage their stock and reduce the carrying cost of the products of the business. Some of the purposes of inventory management software are:
- Balancing the inventory required
- Tracking the order of the inventory and the locations
- Receiving items in the warehouse
- Tracking sales of the products
- Alerts about the stock decreasing in the warehouse
What to consider when selecting an inventory management software?
Before going for inventory management software consider the following points so that it helps in the growth of the business:
- Number of users
- Devices it is accessible on
- Online and offline availability
- Monitoring of orders
How to select the best Inventory Management Software for your Business?
To select the best software for the business you must consider the following:
- Analyse the need for the software- it is important to check why you need software for managing inventory. There are several things which are replaced by it like manual management, availability of products, forecasting the order, etc.
- Look for the specifications- Software must be selected only when it provides features that help in minimizing the extra cost involved in inventory management. For this look for the features like mobile inventory count, voice search activation, re-order management, alerts for orders, product categorization
- Consider practical factors- Some factors have to be looked upon as the cost of the software, simple to use, integrations
Advantages of Inventory Management Software
You have to manage the inventory efficiently to get the most out of it, and you need to be able to track your inventory to know when to order, how much of it to order, and how much you have left.
At the same time, you need to be able to predict what inventory to order so that you can plan for the future and know when you’re going to need to order more. Many software provides tools that help in the suitable management of the inventory of a business. Some of the advantages of the same are:
- Increase in efficiency and time management
- Automatically updates accounts
- Reduces the double data entry system
- Easy tracking of inventory
- Establishes access rights to user
What Are Some Free Inventory Management Software in India?
Some of the free inventory management software are:
- Lio- Specifically designed as a mobile app it is used to manage all the business-related data in one place, quick and easily accessible it helps small businesses to track their orders and make lists.
- Vyapar- Available in Hindi and English language, the vapour is one of the most successful free inventory management software in India. This app is completely free for mobile access and desktop use. A 30-day free trial is given with a subscription of ₹1,999 for a year.
- Oracle NetSuite ERP- It is the cloud ERP software that helps in reducing manual control up to 70% and uses all back-office processes like financing, management, etc. It is a mobile app and API.
- Captain Biz- It is the most affordable software for GST and non-GST companies using inventory management. It helps in generating invoices, tracking inventory, listing suppliers and customers, etc. it is endorsed by the GST Government of India.
- Busy Accounting Software- An easy-to-use software for quality inventory management, it helps in managing the business efficiently by providing them simple features. A free trial is available and a subscription of ₹7,200 is required thereafter.
- Zoho Inventory- A mobile app and API usage makes it one of the best in the list of the software, it helps in managing various things in one app like packaging, shipping, warehouse, etc. The yearly subscription is ₹14,999 after the free trial.
Inventory Management In Excel
Excel is a cost-effective program that can be used by startups or businesses at a low cost. It helps in creating templates for easy management of inventory and other business-related categories. You can set up your templates or you can download any template online. Plus, you can use excel on mobile as well as desktop.
Many templates are available to work on free inventory management software in excel. Excel is already a computer-based program with spreadsheets. These templates make it affordable for the users to clearly find what they are required to do.
They contain columns with different headings from which it is easy to access and record. It works as a substitute for other inventory management software and is helpful in managing the inventory of new businesses in the market. It may not be useful for large-scale businesses but for small businesses, it can work as a wonder.
Excel comes with a few features that can help in sorting a template for your business but you mustn’t make mistakes while setting it up. A businessman or manager can simply make a template using the spreadsheet form of excel.
In the templates, you can include columns for inventory list, order quantity, stock, sales, purchase, etc. As you successfully create a template with the different columns you can use various formulas in it. These formulas can reduce your worries about manual checking of the data. Some of the useful formulas are:
- Sum helps in adding the values you have written in the column so that it is easy for you to select all these values at once and your added value is formulated. But first, you will have to use the formula if there is a need to find some of the two cells. The formula to be used is cell*cell and is to be inserted in each line
- Another formula for you to be used is Sort. It helps in sorting the cells and maintaining the order of the columns accordingly so that you know how much you have to order, how much quantity is left and other information about the same. If you use subtraction for two cells it will easily sort out stock in use. You can find the sort formula from the drop-down menu that appears by right-clicking the mouse. You can choose from its option whichever you prefer
- The rank option is also very useful, it helps in ranking the stock which has to be reordered. It is different from the sort because it automatically allows the order and inventory quantity to be stocked accordingly while the sort only organizes it in order. The formula for rank is =Rank(Cell, Cell: Cell)
Tips For Managing Inventory On Excel
It is important to keep in mind that excel is not an easy program to use, many professionals even make mistakes and for undoing that it takes double the time you spent on making one template. Below are some tips that can help you to manage easily:
- Always update the sheet as soon as some changes occur in the inventory such as order quantity, sales or purchases
- Take time to maintain the data monthly or quarterly for easy access to the historical data. Maintaining the sheets will also help in evaluating how many sales or orders or purchases have been made in the month
- Do the data review from time to time, check if formulas that are used are right and add any cell if required
- Use an auditor for tracking the documents for valuing your profits or losses
Also Read: Credit Management Guide for SMBs
How does Lio help?
Lio is a useful application that helps in maintaining records in the form of tables and spreadsheets. It helps the business to record the activities which are easily accessible 24/7. Various templates are provided for specified purposes which are handy to use for anyone.
The mobile integrated app is convenient and the users find it not so difficult to use. It is one of the best for managing inventory, ordering and holding it to be available for the right time. It can be used by small businesses without any headache or problem because of its valuable features.
Not downloaded the Lio App yet? Here is how you can start with Lio App.
Step 1: Select the Language you want to work on. Lio for Android
Step 2: Create your account using your Phone Number or Email Id.
Verify the OTP and you are good to go.
Step 3: Select a template in which you want to add your data.
Add your Data with our Free Cloud Storage.
Step 4: All Done? Share and Collaborate with your contacts.
Frequently Asked Questions(FAQs)
Why is ERP important during inventory management?
Enterprise Resource Planning(ERP) helps in providing insights to supply chain operation, accounting and combining the information in one place.
Why is inventory management useful?
Inventory management helps managers to know when any item is required for ordering and to be kept in stock for future use so that there is no impact on the production process.
What is the impact of inventory management on working capital?
When not in use inventory affects the working capital directly. The proper use of the inventory keeps away the holding of too many items and inventory management can be very useful.
How is online software for inventory management better than using spreadsheets?
Online software is better than spreadsheets as it promotes reducing human efforts and maximizing productivity in other processes.
How to improve Inventory management in business?
A5. To improve this type of management, it is more suitable to use online software rather than manually doing it because it will help in maintaining suitable and timely records.
How to choose the best inventory management software?
Choose the one which you find simple and helpful for your business, get all the knowledge required first and then make the decision.
Does inventory management software have any disadvantages?
Inventory management software is of great use and provides a suitable management option but it is local software and works only on the system it is enabled on.
Also, some of the free software stops working after limiting the order, purchases, etc, so you subscribe to them to use it further.
Inventory Management plays a major role in any organization. It provides customers with products and services that meet their needs and the needs of the organization.
With Inventory Management a business can ensure that the appropriate amount of inventory and the right quantity of inventory is available at the right price and time to satisfy customers and the organization as a whole.
An online inventory management software free of cost is more useful in maintaining records and order details because of its accurate calculations. The apps and software provide different features that help businesses to improve and maximize profits.
The above article provides knowledge about this management and software regarding it which can be very useful for business. A company finds it more suitable to do the accounting of the goods produced and sold.
I hope this article helps you understand the inventory management system.
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