The Business Case for Upgrading from Spreadsheets to Dedicated Management Tools

 

Many companies still manage their inventory with spreadsheets.

And they’re paying the price. A few columns and rows might have worked in the past, but they’re wholly inadequate for today’s complex inventory challenges. Spreadsheets break, they’re slow and they leave you blind at a time when you need insight the most.

Here’s the issue:

43% of SMBs either don’t track inventory at all or use outdated manual methods. When half of your competitors have access to better data than you, it’s a problem.

The bright side? Transitioning away from spreadsheets and into a purpose-built inventory management tool can revolutionize how your business manages inventory levels…and there’s hard data to back it up.

What you’re going to learn:

1. Why Spreadsheets Are Costing You Money
2. How Proper Inventory Management Reduces Excess Stock
3. How Inventory Software Can Help You Reduce Excess Stock
4. Make The Switch (Minus The Pain)

Don’t waste another minute stuck in spreadsheet purgatory. Here’s everything you need to know.

Why Spreadsheets Are Costing You Money

Spreadsheets aren’t necessarily bad for inventory management. When done correctly, spreadsheets can offer incredible flexibility and adaptability.

But that’s just it. Most people don’t do spreadsheets correctly. Especially when it comes to keeping track of hundreds (if not thousands) of SKUs across warehouses, stores and more.

The problem with spreadsheets:

You can’t get real-time inventory data from a spreadsheet. Not unless you want someone to manually update your stock levels every minute of every day. Spreadsheets are slower and prone to human error.

Companies using spreadsheets often experience excess inventory issues because they literally don’t have the insights required to make smart inventory decisions. If your team can’t see what’s selling and what’s not…they’re going to order too much.

Ordering too much = excess inventory.

The better solution? Use inventory replenishment software that forecasts demand automatically, tracks your stock levels in realtime and clearly lets your team know what to order and when. This eliminates excess inventory issues by taking the guesswork out of ordering for good.

How Proper Inventory Management Reduces Excess Stock

The average business owner underestimates the cost of excess inventory. It’s not just old products taking up storage space…

It’s everything else that comes with it.

Carrying costs.

Interest. Warehouse rent. Labor costs. Time wasted reshelving misplaced items.

When you order too much, those hidden expenses rack up fast.

• Did you know storage and inventory holding costs can rise 20-30% when companies have too much stock on hand?
• Interest rates for retailers have surged 40% since 2021.
• Warehouse rents have reached an all-time high.
• Labor costs aren’t going anywhere, either.

Between supply chain delays, global pandemics and an overall shift in how companies manage inventory post-COVID, stocking excess inventory is more expensive than ever.

Excess inventory isn’t just expensive. It’s costing businesses bigtime.

Check out these stats:

• The average company holds $142,000 more in inventory than they need to satisfy customer demand.
• Mid-to-large sized businesses that employ 500+ people experience excess inventory rates of 44% of total inventory.
• Too much inventory leads to an annual profit loss of up to 30%.

That’s millions of dollars of waste sitting in storage facilities all across the world.

Who knows? There could be some in yours.

Ouch.

How Inventory Software Can Help You Reduce Excess Stock

Inventory software was made for this exact problem.

Rather than using outdated spreadsheets, inventory management software is designed to give you actionable insights that keep your stock levels consistent. With features like demand forecasting, realtime tracking and automated replenishment notifications, you can say goodbye to excess inventory for good.

Here’s where inventory software shines:

• Demand Forecasting: Inventory management software uses past sales data and trends to determine how much stock you’ll sell in the future. No more educated guesses.
• Realtime Stock Levels: Keep track of every item in stock, sold and ready to ship across all locations. You’ll always know how much inventory you have on hand at any given moment.
• Automated Reorder Points: Get notifications when it’s time to reorder certain products and exactly how much to replenish. Say goodbye to over-ordering.
• Identifying excess stock: Inventory tools can also help you identify excess inventory fast. This makes it easier to plan promotions and sales for products that aren’t moving.

Businesses who use automated tools experience 30% fewer stockouts and improve their operational efficiency by up to 50%. Spreadsheets can’t come close to that kind of performance.

Oh, and it doesn’t even cost you extra to switch. Inventory management systems reduce excess inventory which lowers your carrying costs. That gives you more working capital to grow your business and make improvements where they’re needed most.

Make The Switch (Minus The Pain)

Making the leap from spreadsheets to inventory software can seem daunting. But that doesn’t have to be the case.

Here’s a 3-step process to make your transition easy:

Step 1: Do an inventory audit. What products do you have too much of? What products do you run out of too quickly? Figuring out what you have (and don’t have) will help you identify problem areas before you begin organizing.

Step 2: Pick the right tool for your business. Every business is different. That means you don’t need an enterprise-level software with every bell and whistle. Many SMBs can benefit from simpler tools made with smaller inventory challenges in mind.

When you start your search, look for software with:

• Realtime inventory visibility into all stock levels
• Automatic demand forecasting technology
• Seamless integrations with your existing systems
• Readable dashboards and reporting features
• Automated alerts when stock is low or excess

Step 3: Take things slow. Migrate one product category at a time. Train your staff how to use the new tool and work through any kinks. Once everyone is onboard, you can begin expanding the tool to new areas of your inventory.

You don’t have to flip the switch overnight. Take baby steps until you’ve fully transitioned away from spreadsheets.

Better yet, don’t go cold turkey. Mix spreadsheets and inventory software together for awhile. That way, your team can get comfortable with changes without feeling like everything they knew was pointless.

Wrapping Things Up

At the end of the day, spreadsheets didn’t exactly fail anyone. Businesses just outgrew them.

Inventory management is more complicated than it’s ever been. Carrying costs are at an all-time high, interest rates are rising and storage fees are stretching businesses thin.

But there’s hope.

Inventory management tools give you the visibility you need to reduce excess inventory once and for all. With features like:

• Realtime inventory tracking
• Automated demand forecasting
• Customizable low stock alerts

You can stop guessing when it comes to how much to order. Software does the heavy lifting for you.

Making the business case to transition away from spreadsheets has never been easier.

All you have to do is make the leap.