What kind of inventory tracking system do you use? One of the first things you want to do when taking on inventory is to set up a system where you are able to track what is on hand, what has been sold and your reorder point. There are several software applications that can help you track your inventory. If you have a smaller business you may be manually tracking your inventory.
Whether you use inventory software or manually track your inventory you will want to have inventory identifying numbers that will help you determine what you have in inventory. Each item of inventory should have an identifier so when it is sold or remains in inventory you will know what the item is just by looking at the identifying number.
Setting up identifiers for your inventory system does not need to be complicated. You must determine what type of information is important to you. Do you want part of the inventory identity number to contain a portion of the date? Do you want to carry forward part of the supplier number or assign a letter or number to a supplier? If you have several different types of products do you want an identifying number or letter to correspond to the type of product?
For example: If you are a children’s clothing retailer you may sell shoes, pyjamas, pants, shirts, under garments, hair accessories, hats, coats etc. You may have 10 different suppliers and each supplier may have codes or numbers attached to each type of item you purchase. The year or month you receive the goods may be helpful. You may create an inventory identifying number for a pair of shoes as follows:
Sh – for shoes (using 2 letters reduces doubles like pyjamas and pants that both start with p)
B – for boys
12 – for size
Ax – for Axle the supplier
09 – for the month received
Inventory identifier – ShB12Ax09
Inventory item identifiers that mean something are helpful when you are looking for specific items. Immediately when you see an inventory report or tag in this example the first letters Sh identify a pair of shoes. These types of identifiers save time and frustration. Choose inventory numbers for your products in a manner that you can relate to and spend less time processing inventory and more time working your business.
The size of your business, the number of sales you process annually, the amount of time you want to dedicate to inventory tracking, cost, will all help you determine what type of inventory system you set up – whether it’s inventory software or a manual inventory process. Regardless of the type of inventory system you choose inventory indentifying numbers will be required to process your inventory.