Managing inventory with Excel: what are the pros and cons?
Good inventory management is essential for optimizing your supply chain and distribution. This is true for all sectors, from construction to food processing and the fashion industry. But which tool should you use? A lot of entrepreneurs and SMBs use Excel or another similar spreadsheet software. But is using a spreadsheet enough to manage your business effectively? What are the advantages and limits of this system? Take a look at our guide comparing managing inventory with Excel with using specialist software!
What are the issues associated with inventory management?
The reason inventory management is so important to businesses is because of its central role in the supply chain. Optimizing your inventory management means optimizing your costs, your space, and your time, which are all precious, limited resources. But it also means optimizing the quality of your service. The way you manage your stocks has a direct impact on all your day-to-day logistics and sales. By tracking and keeping control of your inventory, you are constantly monitoring the situation, helping you anticipate changes in the market. This helps you avoid stock-outs, ensure your products are permanently available, and keep your customers happy.
Two recent examples underline the issues relating to good inventory management. In March 2020, the panic caused by the first lockdown emptied the stocks of certain food and hygiene products (pasta, toilet paper, etc.) in record time. One year later, the Ever Given container ship running aground in the Suez Canal has slowed down the supply chain around the world. In both cases, the businesses who best managed their inventory were the least affected.
Tracking inventory with Excel: what you need to know
Managing inventory with Excel: how does it work?
Excel is easy to use, has a familiar interface, and the cost of a license is low, meaning it is often a company’s top choice for managing its business. The tool is in the form of a workbook divided into several worksheets. This widely used non-specialist program can be used for tasks ranging from accounting to scheduling. In the specific case of inventory management, you can use it to manually record merchandise entries and removals. From straightforward inventory management to order management with inventory tracking: the features adapt to suit your changing needs.
5 things you need for good inventory management with Excel
- Categorized items – including an SKU reference, the item name, a description, the price per unit, and tax. Other data such as the barcode, the brand, labels, the supplier and the warehouse location may also be added.
- Inventory tracking – manually entering (and updating) merchandise entries and removals.
- Customer database – with the full name, phone number, email address, and billing and shipping address.
- Billing information – with the customer name, invoice number, billing name and address, name, price and quantity of items, payment terms and dates, etc.
- A feature for generating purchase orders and estimates.
Excel is not suited to more elaborate order management, meaning it can quickly become complicated and hard to manage when your business’s needs evolve. Inventory management is not a spreadsheet’s primary purpose.
What are the limits of Excel as an inventory management tool?
Managing inventory manually in Excel does not just waste time, there is also an increased risk of making mistakes (carelessness, incorrect formulas, oversights, tiredness, etc.). The risk of losing data is also a serious concern. Moreover, as Excel is not an automated solution, you cannot track your inventory in real time. And only one employee can access and modify the file at a time. That is where specialized software comes in!
Why use specialized software for inventory management?
When should you invest in specialized software for managing inventory?
As your business develops, your inventory grows, your orders increase, and you take on more employees, Excel becomes a limited tool. You cannot manage everything with an Excel inventory spreadsheet. Specialized, automated inventory management software offers more security and flexibility. When spreadsheets no longer allow you to effectively manage stocks or when you increasingly encounter errors and frustrations, you need a collaborative solution. Erplain’s sales and inventory management software designed specifically for small businesses has the solution. Get a 360° overview of your inventory and business!
5 great reasons to choose specialized inventory management software
- Automated inventory and order management - saving you an average of one hour per order (according to Erplain customers).
- Tracking inventory in real time – for improved merchandise traceability.
- Statistics – to help with decision making and inventory valuation.
- Customer satisfaction – due to the reduction in the number of mistakes and an improved level of service.
- A wide range of features – such as creating bundles, or managing pricing or reorder points.
Managing inventory with spreadsheets could be a suitable solution when a business is just starting out, but its limits soon become apparent. As you accrue more products, orders, and users, specialized software becomes a must. Easy to use and specially designed for entrepreneurs and SMBs, the system developed by Erplain simplifies sales and logistics. Keep complete control and visibility over your inventory and sales!