Inventory management isknowing what your warehouse has and where your stock is. This is better executed with inventory management software. However, it can’t be effective in optimizing your inventorywithout back office systems. It must be integrated with back office and accounting systems. Integrating it with these systems can eliminate the need for manual intervention. This ensures that what you have in stock matches what’s in your financial report.
Big companies integrate inventory management software directly with accounting and back office systems. This helps them optimize the inventory management.This integration offers a competitive edge in terms of planning effectively. This also offers a better way in minimizing labor costs and errors associated with manual data entry.
Having the right inventory software for your company is a daunting task. It’s even harder to choose a software integrated with back office and accounting processes. In order to choose the right one, you’ll need to assess your needs today. You’ll also need to assess what your needs will be in the future, when your company expands.
In order to achieve maximum benefits, it is important that you take note of these guidelines. Your integrated solution should be real-time. It should also be flexible and transparent to the users. Lastly, it should be scalable and reconcilable.
Why Does Inventory Management Software Need Back Office Integration?
A lot of big companies invest in software integrated with back office systems. These companies remain successful even up to this day. What’s the secret? Here are the three main benefits when companiesdo that:
- It provides inventory visibility to the supply chain partners.
- It optimizes the inventory in order to meet ROI goals and product availability.
- It states the inventory in financial reports with 100% accuracy.
There are a lot ofother benefits when you integrate your software with back office systems. But these three provide you with a significant impact to your company.
What is supply chain visibility?
Companies use supply chain visibility in managing customer shipments and inventory levels. In order to do this effectively, the software needs proper integration. It shouldn’t only be integrated with the company’s back office. It should also be integrated with 3PL and supplier. It may also be integrated with third party logistics systems.
With the fluctuating inventory levels of your company, the customer’s needs are alsogrowing. The supply chain visibility helps ensure that products are available when needed.
What is inventory optimization?
It’s important for customers and investors to have the right amount of inventory on hand. This drives customer and investor satisfaction. Customers would ask for fresh products on hand. Investors, on the other hand, would prefer no capital tied up in the inventory. These two are conflicting objectives which can cause a big problem.
Balancing conflicts between the supplier and the investor can be tricky. It can also be more expensive than the labor investment. There are also activities that can potentially reduce your product’s availability. These activities include counting, storing, and reworking inventory capital.
Because of these, you need to plan the right amount of inventory. This means that your sales and purchase orders need to have a real time availability. Doing this can help prevent the negative impacts ofa supplier-investor conflict.
What is an accurate financial report?
Financial reports need to have 100% accuracy to avoid problems in the future. Keeping annual reports and tax returns accurate is crucial for the government and for your investors.The value of your inventory can be a big part of your stated assets. The recorded value in the books need to match the physical value in your warehouse.
To make sure that there is financial integrity in your reports, the software should be integrated with your back office systems.The transactions in the inventory system must be integrated with the back office chart of accounts.
Why is Integration Important?
When you integrate your software with back office systems, you need to make sure that it meets the standards. It should be real time, flexible, and transparent to users. It should also be reconcilable and scalable.
Being real time offers the availability and visibility to your consumers’ supply chain partners. This ensures that your reports are always updated and accurate. Being flexible and transparent ensures consumers that the software will work. Changes and adjustments may be needed with the Integration. It’s important for the inventory management software to work. Users don’t think about how the integration works. If it works, then they’re satisfied.
Being scalable means that the software can accommodate a large number of users. There are companies that don’t focus on the scalability of their software. That’s okayfor small companies. But as companies grow, there’ll be a need for more users to utilize the software. You need to make sure that your software can accommodate high transaction volumes as your company continues to grow.
How Does Integration Work?
The simplest way to achieve the objective and criteria for integration is to find an ERP system. The system needs to have an inventory management module which meets your company’s needs. If you think it’s not possible, then you can choose other options available.
An inventory software and an ERP system can be a good option, as long as they have open and flexible API’s. If you still can’t find one, you can still integrate your software. You just need to know that the integration may not be real time. This means that it will cost more. It will also require constant maintenance. That’s because this kind of software needs more upgrade to meet your needs.
This allows you to still perform manual updating and reconciling between the systems. With this kind of system, you’ll still be able to keep the software synced. However, the results may not be as good. This kind of system will not work for a very long time. In short, this will need to be replaced after some time.