POS 101: Inventory Management
No one ever said starting a business would be easy. It’s not. Starting and running a business is downright difficult. If you want to succeed in your restaurant or retail business, a working knowledge of point of sale technology (POS) is essential, especially when it comes to the tools you need to manage your inventory.
Managing your merchandise requires so much more than simply knowing how many items you have at any one time. This article will take you through all the potential tools you could be using, and guide you to some POS systems that are particularly well-suited to businesses that need advanced inventory management features.
Which Inventory Management Tools Do I Need?
The inventory management tools in your POS system are designed to help you keep track of your stock. The following features should help you efficiently manage your merchandise/materials, reduce overall waste, and save money over time. Use them!
- Record Keeping. Any good POS system will allow you to keep track of the quantities of each item. When you know exactly what you have (and where you have it) it’s easier to make informed decisions about purchasing. Waste not, want not!
- Multi-location management. This is an important feature for any business owner with multiple store locations (either retail or restaurant). If your POS allows for multi-locations management, you should be able to view details about inventory at individual locations and get a bird’s eye view of the total combined available stock at every location. Another useful feature is the ability to easily transfer inventory between locations. When transferring inventory, your POS will maintain an accurate record of inventory quantity and location.
- Low-inventory tracking. Low-inventory alerts are some of the most important features a POS inventory management system can provide. The complexity of low-inventory tracking tools varies somewhat from software to software. Some programs simply alert you when inventory levels fall off to a specific level (usually set by you). More advanced systems will automatically reorder for you when your stock decreases to a certain preset point. If you are concerned about over-ordering, a few POS software solutions (like ERLY) even allow you to set a maximum order point at which no further orders will be made.
- Search functionality. The ability to search for your products is an integral part of managing them (this applies to both retail and restaurant businesses). You’ll want an inventory system that provides for smooth and easy product searching. This is done by assigning categories or tags to products. A good search function will be able to find the product you are looking for based on item tags (size, color, etc.).
- Location-specific price modification. In today’s global world, it is helpful to have a POS system that automatically adjusts prices (and taxes) according to location. (Location-specific price modifications will likely be more valuable for retail businesses.)
- Raw ingredient tracking. Raw ingredient tracking is one of the most important features a restaurant POS can have. Because foodservice businesses work with “raw” ingredients which are eventually assembled into a final product (ground beef, cheese, tomatoes, pickles, and mayo are used to create a hamburger, for example), it can be extremely useful to have an inventory system that keeps track of both raw ingredients and complete products. That way, you can get an accurate idea of where you need to be ordering more and where you’re simply wasting product. For a more detailed description of what raw ingredient tracking can bring to the table, read POS 101: Raw IngredientTracking.
Which POS Systems Have Good Inventory Management Tools?
Keeping the above features in mind, the following are four POS software programs that are particularly notable for robust inventory management:
ShopKeep (see our review) is designed for SMBs, either in foodservice or retail. Despite being geared towards smaller businesses, however, this POS boasts some advanced inventory management features. ShopKeep’s ability to set reorder points is particularly impressive. Once a reorder point is reached, Shopkeep can order any quantity of an item (depending on your preferences) — what’s more, it knows which vendors to order from. In addition, items can be ordered as “raw goods.” This is an excellent feature for restaurant businesses that deal with, and assemble, raw ingredients.
Lavu (see our review) is especially appealing to restaurant owners due to its ability to manage inventory at either the ingredient or complete dish levels. Inventory can be managed from the remote back office or front-end register. Lavu can create low inventory alerts, but does not currently have the capability to transfer inventory.
Vend (see our review) has nearly all the bells and whistles you could want in a POS system and is a fantastic solution for retail operations (though it lacks restaurant-specific features). Vend actually allows you to include images of products when uploading them into your inventory. Prices, taxes, and costs can be adjusted according to location; inventory can be imported/exported via CSV file; you can also import can create barcode labels.
ERPLY‘s (see our review) inventory management is highly advanced and suits retail operations. This POS boasts automatic reordering and maximum stock level limits. It is designed for businesses of the larger side and allows for easy viewing of inventory across multiple store locations. In that same vein, you can easily transfer items between store locations and your inventory will automatically update. For the seller with a wide customer base, Vend comes equipped with pricing that can be determined by location, customer groups, promotions, and sales.
Like anything else in business, becoming knowledgeable in inventory management takes time and comes with experience. Even as an inexperienced business-owner, however, you can make smart, practical decisions about which inventory management features are important to you. When deciding on a POS, think about how large your inventory is likely to be and how often you will have to replenish it. Having a POS that helps you eliminate waste and maintain steady stock levels will go a long way to your business’s solvency and eventual success. To get started, take a look at some of our inventory management software reviews!