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Not taking inventory: What are the consequences for your business?
Posted on December 17 2021
Reading time: 3 minutes
Failure to implement an inventory management system can have a significant impact on your business. For companies whose business is based on the sale, loan, distribution or use of materials (assets), the success of the business relies heavily on inventory.
Inventory is a way to ensure that equipment is working and to report breakdowns. Without a regular inventory, you won’t know how much equipment your company has, or even how well it is working.
Equipment failure can be very costly and can impact your business. Monitoring your equipment and the parts that make it up is essential to ensure that your equipment is sustainable. Inventory allows you to be ready before a problem occurs, since you will be able to track the condition of the equipment and plan preventive maintenance.
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Hector allows you to automate your inventory and centralize your company’s important data.
Companies sometimes conduct an accounting and financial audit to prove their financial credibility. The examination of a company’s financial statement allows to ensure that everything is in conformity and to identify potential mistakes.
If you don’t keep track of your inventory and your company needs to do a financial audit, you won’t know what you have, which will make it very difficult.
Also, it is mandatory for all businesses to take an annual inventory. In addition to wasting a lot of time, you may be fined.
Financial consequences / non-optimized budget
Inventory management software allows you to keep track of your materials on a regular basis. You will quickly notice if your quantities suddenly change from one day to the next and you will have a history of what happened. So inventory helps prevent fraud. How can you identify theft if you are not aware of your inventory quantities and materials?
Poor inventory management is detrimental to the smooth running of your business and the sustainability of your sales. Inventory management software helps you optimize your budget by allowing you to purchase and store your material in an optimal way.
Poor inventory management
The inventory allows you to ensure good inventory management. Poor inventory management can cause several problems for your company:
Overstocking: When a company stores too much product for the amount used. This can potentially result in a loss of revenue and space
Under-storage: When a company does not have enough products in stock to meet the demand. This can lead to a stockout and affect the company’s image.
Dormant stocks: When a quantity of stock is not or rarely used. This can become very costly for companies, as this type of product does not generate any revenue and takes up space that could otherwise be used.
A good inventory management system will constantly update your inventory, so you know exactly where your goods are. It will also help you plan your budget.
A worthwhile effort
Setting up an inventory management system may seem complicated and require a lot of effort. However, good inventory management is necessary to maximize your productivity and reduce errors.
You’ll get a complete picture of your equipment so you can make better decisions for your business.
How Hector can help you
Hector is an inventory management software that is part of a cloud solution, which can help you in your inventory management process.
It is a 100% customizable and affordable software that allows you to quickly take inventory of your assets. Hector offers a support service to facilitate the implementation of the software in your company.
Protect your business investments, increase your management performance and limit your time and material losses. Offer you a simple way of having access to important data in the system when you need it.