While more and more small business owners have embraced point of sale systems for their retail stores, there are still some that rely on old-fashioned cash registers. Unfortunately, these folks mistakenly believe that POS systems are only appropriate for larger businesses or that they are not worth the investment. In reality, a POS system is much more than just a means of collecting payments from your customers. It can be used to help with a number of important business functions – including inventory management.
Keeping track of inventory is difficult for even the smallest of businesses. With a POS system, though, the process becomes much easier. Whether you currently do not one or you do not know how to use a POS system to manage your inventory, here are a few ways in which they make inventory management easier.
Track Top Sellers
When you are trying to run a successful retail business, keeping track of your best-selling items is a must. Understanding the products that your customers buy most frequently allows you to make informed decisions regarding which items should be displayed most prominently in your store and which ones you need to keep in stock at all times. Tracking top sellers also helps to ensure that you order enough supply of popular products to keep up with demand.
POS software automatically keeps track of purchased items and can generate reports to give you a clear picture of your top-selling items. Even if you aren’t familiar with how to use your POS system to its fullest potential, you can easily find out how to access this vital information.
Establish Inventory Levels
If you don’t order enough products, you’ll lose sales due to customers not being able to buy something when it is out of stock. If you order too many, you could get stuck with unwanted merchandise and end up selling it at a loss just to recoup a percentage of your investment. Your POS system can help you avoid both of these potentially costly problems by enabling you to establish appropriate inventory levels.
When setting stock levels in your system, take a close look at your sales history instead of basing these important decisions on your intuition. Pay attention to how many of a particular product you’ve sold since your last shipment. Also, take a look at the historical data to see if it tends to sell better during certain times of the year. With this information, you can order enough stock to keep up with demand without overbuying.
Track Lost Sales
Lost sales can, of course, cost your business a lot of money. Just like it’s crucial to know what your best-selling products are, you also need to track the items that you are losing sales on most frequently. In term of inventory management, this means using data to see when you are losing sales on particular items because they are not in stock. Large retailers tend to keep a close eye on this, but smaller businesses often overlook it.
Use your POS system to track sales on specific items. Use the data you gather to estimate the number of sales you lose every time one of the items is out of stock. You may be shocked at just how much money you are losing simply because you aren’t stocking enough of a product. Figuring out exactly how many units to order can be extremely difficult, but POS software makes it much easier by allowing you to view buying trends and other helpful data.
Create Purchase Orders
One of the great things about your POS system is that it makes it much easier to create purchase orders to send to your suppliers. Instead of hand-writing everything on your orders, use your POS system to enter the desired quantity for each item you are ordering. This will create a record of how many products you typically order and allow you to make an informed decision the next time you place an order. Also, you can set a minimum number for each item. When your inventory drops below the minimum number, a purchase order can automatically be generated to help ensure that you always keep products in stock.
Maintain Inventory Accuracy
For many business owners, reconciling inventory is a dreaded task. The act of going through all of the products in your store to ensure that the physical quantity matches your inventory records is time-consuming and can be extremely frustrating. And without a POS system, the process often needs to be done manually.
Your POS software, however, makes the entire process much easier. When you receive a shipment of merchandise from a supplier, you can instantly confirm that the amount you received matches the amount on your purchase order in your POS system. The system also keeps track of when products are sold, if they are returned, etc. In short, it eliminates a lot of the manual work and makes it much easier to maintain inventory accuracy.
Running a retail business and keeping track of inventory is no easy task – especially when you are managing inventory manually. POS systems make inventory management easier and much more efficient for businesses of all sizes. They are relatively easy to learn how to use, and they can help you keep track of the products you have in stock, how well they are selling, and when they need to be reordered.
In addition to saving you a considerable amount of time, leveraging your POS system for inventory management can also save you money. By helping you avoid common issues like over or under-ordering, it ensures that you have what customers need, when they need it. If you are tracking inventory for your business manually, consider making the switch to a POS system. Trust us, you’ll be glad you did!