Trouble tracking inventory? Try cloud-based accounting
The fourth quarter of the year can be your strongest selling season — or it can be an inventory nightmare. Here’s how an accounting website can make your holidays happy.
Managing your company’s inventory is a year-round challenge. You’re constantly trying to nail the sweet spot: inventory levels that let you fulfill orders immediately, but don’t leave your shelves piled high with unsold items.
This challenge grows exponentially every year as the holidays approach. You know that traffic on your website or in your physical retail location will start to spike. The pressure is on consumers and businesses to find the perfect gifts for their families and their clients. Did you stock the right stuff?
No matter how much you’ve prepared for the onslaught, your anxiety level isn’t likely to ease until you’re ringing in the New Year — but you can minimize your stress. The information, insight, and inventory-management tools that cloud-based accounting applications offer can help you:
- Make smarter business decisions before the season starts
- Stay nimble throughout the holiday rush
- Apply what you’ve learned to your planning for the next holiday season
You probably sell at least some products in the fourth quarter that you sold online or on your sales floor for the first nine months of the year — and during last year’s holiday season. But how many of each, and in what colors, sizes, models, etc.? What vendors provided the best service? What should you never, ever stock again, and why not?
Cloud-based accounting applications can tell you those things — and much more — without breaking a sweat.
Three expert types of tools
Today’s state-of-the-art small business accounting websites comply with the same double-entry accounting rules that financial institutions and CPAs and big corporations use. They employ a standard Chart of Accounts, help you create and track sales and purchase transactions, provide tools to manage payroll and inventory, and offer dozens of predefined reports that can be populated with your company’s own data.
Used comprehensively and conscientiously — and under the guidance of your accounting professional — they can give you the information you need to move in the directions that will make your company profit and grow.
Three core elements of these web-based solutions can help you get the real-time data you need to keep your inventory at profitable levels throughout the holiday season:
1) Record templates
How do you store information about your inventory items, your suppliers, and your customers now? If it’s on paper stuffed in overflowing file folders, locating the precise data you need at any given moment is time- and labor-intensive. Instead, accounting websites include record templates: screens that contain a series of blank fields where you’ll either enter information or select options from drop-down lists.
Your supplier records, for example, will contain thorough contact information, but also lists and charts chronicling your order history with them, and any current obligation. Item records provide descriptions, sales tax rates, purchase and sale prices, and any related transactions and history.
If you sell more than a handful of items, you simply must be able to enter, store, and search for these basic details quickly. Accounting websites make these critical details available to you in seconds.
2) Transaction forms
Once you enter data in a record, you will probably never have to enter it again. And all of those details you supplied when you filled out those records can be pulled into invoices, receipts, purchase orders – any transactions that you need to complete to get through the holiday season. In fact, there’s usually little for you to enter at all: you’ll mostly be selecting options from drop-down lists.
This will save you countless hours during the holiday season. Further, accounting websites have advanced search capabilities that allow you to find any transaction you’ve created faster than you could pull the right paper file out of a drawer.
There is absolutely no better way to obtain the numbers you need to maintain healthy inventory levels – especially during the rushed holiday season – than by using a cloud-based accounting application. Excel’s rows and columns can store data neatly and execute complex formulas, but it’s not designed in the specialized way that financial cloud applications are.
Here are the kinds of questions you need to be able to ask — sometimes multiple times daily — to know exactly where your inventory levels stand and when you must quickly submit a purchase order or put an item that’s not selling on the clearance page:
- What inventory items are we stocking?
- How many of each inventory item do I have on hand? Who supplies them?
- What am I paying and charging for each?
- How many did I sell last week? Last month? Last year at this time?
- What items am I waiting for, and who can I contact to see when they’ll be delivered?
- Am I making money or losing it? How does that compare to this time last year?
- How am I doing compared to my budget for this period?
- Am I late in making payments to any suppliers?
Your holiday bonus
Cloud-based accounting applications can’t predict what the hot new items are going to be for the current holiday season. They can’t tell you exactly what your busiest days are going to be, or when a blizzard is going to strike and slowdown sales. They can’t catch shoplifters, and they won’t take a shift when someone calls in sick.
But they can become your favorite new website, your best digital friend, as you navigate the choppy waters of your company’s fourth quarter. They’ll save you time. They’ll tell you precisely where your sales and inventory stand at any minute of any day. And when January 1st rolls around, the insight and information they provide will make you feel confident enough to brave next year’s holiday season all over again.