Today's blog is a guest blog by Justin Velthoen, product manager of QStock Inventory, an inventory management and barcoding solution that has direct integration with Intacct.
Product-based businesses have many facets that are unique to them and require specialists to ensure success. From ecommerce sites to medical offices, from manufacturing to distribution – if you have large amounts of capital in physical products, you need a system that understands the unique needs you will encounter and have the resources to help bring them together. This is where inventory management comes in.
What You Should Track
Items—The first thing you should start tracking is your actual inventory. This includes the raw materials and finished goods in your facility. You may find most of your items already have a barcode on them, and vendors can easily add a barcode to your product before it gets to your door. Most inventory management systems can do a cross reference from the SKU or UPC to your item number, and if the product doesn't have a label, the system should be able to print a barcode at the time of receipt.
The sellable finished good products are an obvious choice, but by tracking your raw materials you can get a more accurate cost of goods value. The more accurate you get this number, the better the rest of your reporting will be and the more visibility you can have to your production from the executive suite.
Item Detail—Once you are tracking your inventory through your workflow, the next step is to take a look at segments of those items and how they perform.
Lot tracking is incredibly important to consumables which might spoil, and textiles where dye lots have a huge impact on the finished product.
Serial tracking is great for medical and electronic fields where you may need to track the exact sale date for warranty purposes, or even each single transaction for health reasons.
Above those you can track what we call dimensions. If you are selling t-shirts this might be:
- Sales channel (web, retail, distributor)
- Sales type (corporate, group, individual)
It could be very valuable to know seasonal traits of one dimension versus another. This is where data tracking really becomes exciting because now we are able to make business decisions based on the data we are collecting anyway, and we are better able to serve the market knowing what it needs.
Why Do You Track It
Reporting—The primary purpose of inventory management is to be able to accurately quote, and then fulfill a customer’s needs. Once we are able to identify what is on hand, when it can be delivered, and start fulfilling orders accurately, it is time to start looking to ask bigger questions of the data collected. The most common questions that can now be answered are:
- How much do I have?
- How much is it worth?
- Where/when did X come in?
- Where/when did X go out?
- Who was the last person to touch X?
- How many of X-dimensions did we sell last quarter compared to the previous quarter?
Barcoding for accuracy and efficiency—The old adage, “Garbage in, garbage out,” holds true. Manual entry is prone to errors and omission. Systems are great at validating data, but the best choice is always to barcode every static piece of data that needs to be recorded. Data entry turns into point and click. The systems can validate the data to make sure that the right item is being picked from the right location, and the users are able to fulfill orders faster and more accurately. It is a win for everyone.
How Do You Want To Track It?
This is where best practices come into play. Most people from a data point of view may tend to have more information than is needed in some of these fields, but that can cripple Operations. I will go over these points briefly, but know that these points can make massive ramifications on ease of use for operations, as well as accuracy.
Item Numbers—The biggest impact you can have is in your item numbers. It is very common to have an item number “Lone Palm T-shirt Large Green.” Really, that would be much better as an item description. The majority of data entry is going to be in operations and we want it to be as straight forward as possible; you will want alpha-numeric only, no special characters or spaces. You will also want it to be short, not only so it is easy to enter manually, but so that the barcode symbol isn’t longer than the label. One way to represent the item above is “034TLG” where 034 is the style, T is t-shirt, L is large, and G is green.
Bin Locations—Many warehouses already have bin locations that, like our revised item number above, make it very clear where something is. A34B2 would be an example that would allow someone looking at it to know that it is in aisle A, bay 34, position B, shelf 2.
What might not be thought about is a picking order. Just like going to the grocery store, you will want to sit with your consultant and decide the best order for a pick path based on your order structure. Optimizing your pick path can save you hours of labor a week.
Intacct can easily manage your inventory, but there may be times when product-based businesses have unique needs that may require additional specialized inventory management software. QStock Inventory has the teams in place to guide you through that path and make sure you end up with a solution that not only fits your accounting needs, but also fits your physical business processes and incorporates the best practices to ensure your success and growth. QStock Inventory integrates with and extends the inventory capabilities of Intacct to ensure you have a system to meet all your inventory management needs.