Inventory management for small Businesses in UAE
How inventory management helps small businesses in UAE?
Any business growth is determined by its efficacy of inventory management, as the majority stake of the working capital is part of the inventory. The higher the efficiency, the better the performance and profits of a business will be. Thus inventory management plays a pivotal role in business growth as through this inventory processes can be automated. Thus continuous monitoring can be done and a decision could be taken at different inventory levels; along with movements in stock and variation in profitability of the business. Thus, businesses become profitable on every step, through enhanced decision making through simple steps recommended in Business Advisory.
Comprehending Inventory Management:
A system of activities carried out with aim of unhindered production, highest customer satisfaction, cost-efficiency in inventory handling, and other processes, through maintaining an optimum number of inventories of the firm. Some core key functions in Inventory management include:
- Inventory grouping, management, and classification
- Warehouse management
- Product Particulars management
- Automated report generation in real-time
- Order processing: sales, purchase, and job
- Third-party stock management
- Valuation of the inventory
Effects of poor or no inventory management:
- A warehouse full of dead-stock leading to spoilage or desuetude
- Skyrocketing expenses
- Dent on the reputation of running out of popular items
- Slow-moving goods, denting customer satisfaction
Features of best inventory management and steps:
Inventory management is carried out through specialized software, which may be generic or could be customized as per the size of the firm by Business Advisory firms. To identify the best inventory management software, firms should look at the following criteria:
- Flexible enough to cater to the requirements: We comprehend that each business is different due to their inventory process- i.e. processing of orders, management of stock. Thus the software should be highly adaptable so that it simplifies and adheres to the process, rather than complicating it. It should facilitate firms to classify and categorize their stocks, create units of the underlying stock in the inventory. Thus the firm need not require deviating or modifying its ongoing inventory procedures.
- Exception handling: Exceptions in the inventory management process is neither a nascent thing nor a once in a blue moon phenomenon. Although, an exception is known to complicate the process, making work difficult in a small business. In such cases, the inventory management software must be capable enough to handle such exceptions, without disrupting the flow of the work. It should be able to handle exceptions in such a way that no particulars or data is left out of the system or decision of the firm, and make access to update data easily in case of human errors in data entry, counting, or failure to record. It should also facilitate providing a bill first and then bring the physical stock into the system.
- Merging accounting and Inventory: One of the best ways to improve efficiency and reduce time in business processes in Dubai is to link the inventory process with accounting in such a manner, that after any update/ addition of invoice, the inventory is automatically updated. In this way invoicing, accounts and the inventory can be in total sync, reducing pressure from the firm. Thus, when reports are generated through this process, businesses get a detailed report which forms the bedrock of decision making.
- Inventory Reporting and Alerts: Deemed to be one of the critical aims of the software and inventory management, it should be able to provide decision-making insights for the firm. It should be able to accept and integrate automatically generate alerts and bills of short-fall, stock availability, stock aging, order quantity, and much more at the highest levels of accuracy.
Thus through inventory management, firms can become more profitable than earlier, as their efficiency will increase manifolds. This will suit small businesses more, as things tend to be more haphazard in these firms. All these reports are generally made on Tally, and through a simple, flexible business management software firms can experience drastic improvement.