How to record inventory for your business

Your inventory is constantly moving through your supply chain — it’s like trying to catch a slippery fish. Think of inventory records as a strong net, keeping the fish (i.e., your stock) from falling out of control. 

Like catching a fish with your bare hands, managing all the inventory coming in and out of your warehouse is impossible without keeping a record. Back in the day, this was done with paper and pen. But now, modern businesses are realizing that this doesn’t cut it. In 2023, document challenges resulted in a productivity loss of 21.3%¹, and so more and more companies are digitizing their inventory records. 

Read on to learn how to record inventory the right way. 

What are inventory records?

Inventory records are a detailed set of documents that track all the goods and materials that your business owns. Basically, it’s about recording anything that can be sold or used in the production process. Maintaining accurate records can help you easily navigate how you operate your business without getting lost in the sea of products. 

Why is it important to record inventory?

You wouldn’t set off on a road trip without a map. So, why would you start the production process without a record of your inventory? 

Here are a few more reasons why you have no choice but to keep a record of your inventory: 

1. You gain a stronger hold on your finances — Knowing exactly what you have in stock goes a long way in helping you calculate your inventory’s value. You need this for not only your financial statements, but your tax reports.
2. Operations become more efficient — Keeping track of your inventory helps you avoid overstocking and understocking, so you always have the right amount of products to meet demand.
3. Enjoy happier customers  — Having a grasp on your inventory means you can fulfill customer orders quicker, leaving them happier and more satisfied.
4. Prevent wasting your inventory — With accurate records, you’ll find it easier to see discrepancies like theft or damage to stock. Even better, inventory management software will be able to pick anomalies out for you automatically!
5. Make more informed decisions — By having the full picture, you can make smarter decisions for your business, whether it’s buying new stock or getting rid of underperforming products. 

Benefits and challenges of inventory records

Keeping inventory records isn’t just solely about jotting down numbers and hoping for the best. You can use it strategically to make other important decisions regarding your business. 

Below are some of the top benefits of keeping accurate inventory records. 

• Better accuracy — Regularly updating your inventory records means you’ll always have precise information when it comes to your stock levels, giving you a better grasp of your operational decisions. 
• Cost savings — By avoiding overstocking, you can save on your storage costs and prevent dead stock, aka those pesky items that never seem to sell. 
• Better management of cash flow — Knowing what you have and what you need to get allows you to manage your cash flow so you can avoid unnecessary expenditures. 
• More productivity — Streamlining inventory processing frees up time and resources so your team can focus on more important tasks. 

Of course, nothing is perfect, and keeping track of your inventory records can pose a real challenge. Below are some of the drawbacks and potential roadblocks that might appear during the process.

• Time-consuming — Taking the time to record inventory can feel tedious, especially if your only tools are pen and paper. It also takes a lot of attention to detail, so you can’t rush. 
• Risk of human error — Mistakes happen. It’s a part of life. But inaccurate records can throw all your numbers off. 
• Cost of tech — If you do decide to buy inventory management software (which we think is probably for the best), then your initial costs can seem expensive, especially if you’re a larger business that needs more advanced tech. 
• Complexity — Managing inventory can feel overwhelming. Big businesses that sell a lot of products will have their work cut out. Breaking it down into smaller, more manageable chunks is the only way to stay organized. 

Tips for keeping accurate inventory records

Are you ready to become an industry wizard? Read our tips to help you keep your inventory records in tip-top shape. 

1. Carry out regular audits 

Make sure to do frequent physical counts of your inventory so that your records always match reality. This will help you to catch any discrepancies early on, so you don’t have to do a complete overhaul. 

2. Use technology 

Investing in reliable inventory management software, like Katana, can help you automate your long task list and eliminate the risk of human error completely. While there are some upfront costs, you’ll save yourself a lot of time — and remember, time is money. 

3. Organize your stock 

Always keep your inventory well-organized in the warehouse. It can be all too easy to let it fall into disarray while you focus on other business tasks. Counteract this by using labels and bins so everything has its own designated space. 

4. Carry out team training days 

You should train your staff in the inventory management process. Hold a team training day to go over:

• How to record inventory
• Proper handling of stock
• Your auditing expectations

If everyone understands what’s expected of them, you’ll face far less of a chance of inventory error.

5. Implement a system that works for you

There are multiple different systems that work well for tracking inventory. These include first-in-first-out (FIFO) or last-in-first-out (LIFO). Having a consistent method for tracking inventory that’s understood across the board is crucial. 

6. Track all your sales 

Keep a close eye on all your sales data. Understanding which products sell the quickest and which don’t will help you adjust your inventory levels, saving you money in the long term. 

7. Set reorder points

As a general rule of thumb, you should set the minimum stock levels possible for each item. When your products dip below this point, you can set reorder points automatically. That way, you’ll never run out of your essential items or disappoint your customers. 

Keep accurate track of your inventory with Katana

Are you feeling overwhelmed by the thought of managing your inventory manually? Fear not! With Katana, you can streamline your inventory recording process and sail smoothly through your business management. 

With features like real-time inventory tracking, automated reorder points, and detailed reporting, Katana helps you stay on track when it comes to your stock levels. Plus, it’s super easy to use, so you can navigate the platform effortlessly. 

So, why not give Katana a try and take your current inventory management to the next level? Sign up for a demo now and reap the rewards today!

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