Inventory management may seem like a standalone task, but in reality, it’s something that can be further optimized for benefit of the entire organization, provided it’s properly integrated with other key back office functions. If you haven’t yet done so or are still on the fence, here are three compelling reasons why integrating your inventory system with other areas, such as accounting, might make sense.
1. Better Optimization – Not only is maintaining the ideal amount of inventory important from a customer satisfaction standpoint, but it’s also critical to managing cash flow and reducing costs. Knowing this and achieving it are two entirely different things. By linking your inventory management system with other back office platforms, like purchasing and sales, the added level of visibility and interdepartmental collaboration can really help keep inventory levels right where they should be, avoiding costly over or under stock situations.
2. Greater Supply Chain Visibility – If your company happens to be like so many others that use a supply chain partner for managing inventory, the more integrated your inventory management system is, the better, and not just internally. It can and should also be linked in with your supplier and/or third party logistics systems. This will provide enhanced visibility into changing inventory levels so that the appropriate amount of stock is consistently maintained.
3. More Accurate Accounting – Inventory isn’t just about counting what’s in stock and making sure orders are placed and fulfilled successfully. It’s also tied directly into the company’s financials, including annual reports, taxes and other accounting statements. Having a fully integrated system that ties everything together can make it significantly easier to track, record and measure the costs associated with your inventory and make the creation and management of financial reports simple and straightforward.
It’s important to point out that in order for an integration like this to be successful, it must be seamless, flexible, transparent, real-time and scalable. The goal is to facilitate a smooth and open flow of information that users don’t have to think about, but rather can just use and benefit from. If these critical elements are not present, the results will not be the positive ones listed above and will likely lead to greater frustration and decreased efficiency due to fragmented workflows.
With that in mind, provided you do your due diligence and choose an inventory management system that is capable of being integrated with other key back office functions, you should be able to improve operations and create a more cohesive infrastructure that will benefit your entire business.
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