Inventory management and its costs are fundamental elements in the balance sheet of a commercial activity. While the goal of a business is often to increase sales, warehouse management is often considered a secondary aspect. However, in this FR Logistics guide we will take a look at how to carry out an inventory, and how this can reduce warehouse costs.
What inventory is and why it is important
An inventory is a detailed list of the goods or resources owned by a natural or legal person, i.e., this document reflects all the belongings of an individual or a company. There are several ways to carry out an inventory, and the method you choose will depend on the needs and resources of your company or business. Here are some basic steps you can take to carry out your inventory:
- Identify the goods or resources that should be included in the inventory. These can range from office supplies to machinery and equipment.
- Create a list or database of assets to be included in the inventory. Be sure to add detailed information about each asset, such as quantity, price, storage location and date of acquisition.
- Assign a serial number or unique code to each asset. This will help you identify and track each asset more efficiently.
- Conduct a physical review of the assets recorded in the inventory. Be sure to count and check each one to verify that it is in good condition and that it corresponds to the information in the list or database.
- Update the inventory information as necessary. Be sure to do this regularly, so that it is accurate and reliable.
Keeping an up-to-date inventory is essential for making decisions about the use and allocation of your company’s or business’ resources. In addition, a well-kept inventory can be useful in case of an audit or to determine the value of your company’s assets in case of a sale and even to reduce costs, how? Read on!
7 Keys to take an inventory and reduce costs
To carry out an inventory and reduce costs, you can follow these steps:
- Identify the products or services your company offers and their respective costs.
- Analyze the demand for each of them to determine if you can eliminate some that are not profitable.
- Review the list of your suppliers and consider whether it is possible to negotiate better prices or switch to cheaper suppliers.
- Study your internal processes and look for ways to optimize them to make them more efficient.
- Use inventory management software tools to make it easier to control your stock and avoid having excess inventory.
- Consider selling used or second-hand products to earn additional income.
- Use cross-selling and upselling techniques to increase sales and improve profitability for each customer.
It is critical to remember that cutting costs does not always mean indiscriminate cost cutting. Instead, you should look for ways to improve the efficiency and performance of your business in a sustainable and long-term way.