Inventory Management — The Right Way to Track Your Stock
What is Inventory Management?
Inventory management is the process of tracking how many products you have, how many have been sold, what needs to be restocked and when to reorder. Without proper inventory management, you face two problems: overstocking (capital tied up) or stockouts (lost sales).
Core Steps of Stock Management
1. Stock Count (Physical Audit)
Count your physical stock at least once a month. Compare with software records. Investigate any discrepancy — it could indicate theft, damage, or data entry errors.
2. Setting Reorder Points
For each product, define a minimum stock level. When stock falls below this threshold, trigger a purchase order. Example: if a product sells 10 units/day and the supplier takes 5 days to deliver, reorder point = 10 × 5 = 50 units.
3. FIFO Method
FIFO means First In, First Out — sell older stock before newer stock. This reduces the chance of products expiring or going out of fashion, especially for perishable or seasonal goods.
4. ABC Analysis
Not all products deserve equal attention. ABC analysis splits them into three groups:
- A items: High value, low volume — give maximum attention
- B items: Mid value and volume — monitor regularly
- C items: Low value, high volume — automate reordering
Common Inventory Mistakes
- Relying only on records without physical counts
- Not setting reorder points for each product
- Mixing old/damaged stock with sellable stock
- Not factoring in supplier lead time
- Ordering the same quantity regardless of seasonal demand
Benefits of Inventory Software
Manual spreadsheets are error-prone. Inventory software provides:
- Automatic stock reduction after every sale
- Alerts before stock runs out
- Insight into which products sell fastest
- Full history of purchases and sales
- Real-time total stock value at any moment
Inventory Management with Amar Hishab
Every POS sale in Amar Hishab automatically updates stock levels. You can set reorder level alerts per product. Current stock for any product is visible at any time, and sales history analysis helps you understand demand patterns to plan purchasing smarter.