[Video] 3 Questions To Ask About Inventory Management Software

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Managing inventory levels is critical to customer satisfaction, cash flow and warehouse management. That’s why you should be asking some critical questions about your current inventory management software.

  1. Can it set the minimum and maximum stock levels for key inventory?

Inventory is expensive. Having too much inventory ties up cash flow. Having too little inventory means you don't have enough on hand to meet your customers' needs. By setting minimum and maximum levels of inventory in your system, you're able to keep just the right amount of inventory for your business.

  1. Can it link sales orders to purchase orders?

This feature is great for a company that wants to order inventory after the customer has already submitted their sales order. By linking the sales order to the purchase order, when that inventory comes in, it's automatically committed to that sales order and can't be accidentally given to somebody else's sales order. This minimizes allocation mistakes and means you don't have to keep a lot of inventory in stock.

  1. Can it identify inventory items that need to be closely monitored?

A really great feature in Microsoft Dynamics GP is something called ABC analysis. This allows you to automatically tag your high-value, high-turnover items that need to be closely monitored as priority items. This will tell you where you need to focus your time and energy on materials planning, but also can facilitate more frequent stock counts so that you can keep a close eye on those items. Because accountants don't like surprises.

Ready to rethink your inventory management system? Contact Prophet Business Group or subscribe to our newsletter for more great content.

-Tracey Wright, GP Software Consultant, Prophet Business Group

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