Often, inventory is something that doesn’t take up a lot of consideration when compared to sales, service, and marketing in a retail business. Of course, those things are important, but having an inventory system that works for you is absolutely crucial. This ensures that as your business grows, you won’t run into problems that could be avoided. We’ll look at how to manage inventory efficiently and without wasting money.
Full Inventory Audit
Doing a full audit of your inventory is the first step. You may do this however you like but be sure to reconcile with your books and determine where everything is. This leads to options for saving money. If you find items were sold, you might consider a better security system. On the other hand, if they’ve been sold, you might want a management system that updates this more easily.
Stock Only What is Needed
It may not always be obvious how much stock you need at one time. However, you can often come up with an estimate based on daily sales and other measurements. Determine what you need and then add on a slight amount more for safety sake. This helps in two ways, when you sell more than expected or when a vendor is unable to deliver on time.
Negative Working Capital
This type of situation involves building relationships with your vendors to where they may be comfortable providing extended credit. As such, you would receive the money from customers for goods that you will pay the vendor for. You instead use the vendor’s capital to sell the goods. This is only possible with vendors who have great trust in you, but can be a reasonable way to save money.
Contact Us to Learn More
At Legacy Capital Lending, we know your business is important to you. We offer many financial solutions for your business and would love to answer any of your questions about our services.