How to Streamline Inventory Management With a POS System

Without inventory management, your supply chain will be all over the place. 

Inventory management is your guide to aligning your inventory from manufacturers to warehouses to customers. In short, it helps you strategically time demand with supply, i.e. have your product in the needed location at the right time.

Inventory discrepancies lead to either overstocking or understocking situations. Both have a direct impact on your business's revenue. 

When you are understocked, you lose sales, and when you are overstocked, you risk resources being obsolete and wasted. Besides money and time, you are also at risk of business failure. 

Low-profit margins coupled with increased overhead expenses ultimately lead to failure. How well you manage your inventory dictates your business’s success.

This is what inventory management is for. It helps a business find the right balance between demand and inventory. In fact, businesses have outdone their stock management with inventory management systems connected to sales. 

Inventory management systems are the tools for modern-day management that ease this process of ordering, storing, and using inventory. They work wonders, especially since they automate end-to-end production with sales intelligence. Businesses can reach full efficiency in operations with systems like a point-of-sale (POS) system.

This article is a walkthrough of inventory management with POS system, its significance, and how your business can make the best use of it.

Recap: What is a POS system? 

A POS system unlocks a new avenue for handling sales and inventory. How does sales tie-up with inventory help you ask? You need tools and inventory management solutions unique to your business and revenue. Feeding real-time sales data to inventory management can help you get there.

Gone are the days of manual labor or even separate software solutions for all functions. A POS system is one software solution for sales, payment processing, and inventory management altogether. This modern solution is designed to update inventory with real-time data. 

Every time a stock unit is sold, it updates the inventory level instantly. It also facilitates sales and processes payments on the same interface. 

Real-time insights on payments and inventory are the keys to optimal inventory management. Operations, sales forecasting, and decision-making are easy with access to accurate real-time data.

How does a POS system help with inventory management?

Maximize the usage of a POS system to avoid stockouts, overstocks, shrinkage, and waste. Here’s how using a POS system to manage inventory can help:

1. Real-time inventory tracking

The best part about a POS system is real-time inventory updates across all channels and devices. Instant updates help attain accuracy and visibility in stock levels. Real-time access to inventory helps with its management and sales. Sales reps get real-time access to stock levels, so they can better assist the customers. Plus, you will have complete inventory control. You’ll be able to prevent stockouts and restock on time. Instant updates on stock are the best way to meet demand levels without unnecessary storage and handling costs.

2. Automated reordering

POS system comes with automation capabilities. You can stay ahead in stock management by automating the process of reordering. You can set alerts and low-level triggers that prompt order placement. Any repetitive tasks and workflows can be automated with the POS system. Other functions that can be automated are price updates, shipment notifications, reorders, customer and supplier communications, analytics on stock performance, and more. You should look for a POS system that gives you the luxury of flexibility and means to automate what you find fit to automate, not what the software vendor dictates.

3. Minimizing stockouts and overstocking

Optimizing inventory is another powerful feature of a POS system. Using this feature you can run through your inventory data and find unique insights. Insights can help you understand market demand and how much stock you must hold to prevent both stockouts and overstocking situations. With access to metrics like inventory turnover, sell-through rate, stock cover, gross margin return on investment, and more, you can understand demand, your show-stopper products, and underperformers. These insights will help you optimize prices, promotions, and reorders. You’ll be able to expound on efficiency and strategy to maximize profitability.

4. Improved sales forecasting

With automation and insights, POS systems give you ample time and the right means to make impactful decisions. The POS system can produce reports on sales trends, inventory turnover, and customer preferences. You’ll have everything at your disposal to pick up trends, forecast sales, and time them with unique inventory and sales strategies. These data-driven insights and decisions give you enough room for product innovation and expansion as well. 

Recommended read: How does a POS help with cash management

5. Reduced manual work and errors

Manually tracking and maintaining inventory is time-consuming. Plus, there’s a high probability of errors. Even if you use spreadsheets to maintain inventory, you risk human errors borne out of manually feeding the data. The POS system is built to reduce manual work and errors. Its powerful features can not only simplify and automate multiple inventory management tasks, but they are also accurate.

How to find a POS system suitable for your business?

Multiple POS systems claim to do the job, but how do you pick the right one for your business? You need to take your time and find the right system so you can make the most of this seamless technology. Here are some factors that can help you make the right choice:

1. Integration capabilities

The first thing you must seek is whether the technology can integrate into your existing tech stack. This includes the commerce platforms, accounting software, and customer relationship management (CRM) tools you use. Without easy integration, your employees will have a hard time obtaining data efficiency in stock keeping. Integration errors lead to data blockages. So, you must ensure that you check the software’s API and integration support.

2. Room to scale

Choose a POS system that is not limited by scale. It should be able to support your business needs and aspirations when you are starting out and also when you are ready to scale your business. It must cater to your expanding product line, sales channels, and scaling operations. 

3. Great user-experience 

A complex-to-use system is as good as a manual process. So prioritize checking out the POS system’s interface and choosing the one that’s easy to use. Go for the one that requires minimal staff training. Solutions with great user interfaces make it easy for your employees to maintain inventory and for customers to make purchase payments. Ask for a demo or trial before you make the call.

4. Features and tools

Built-in features are another critical factor to weigh. You first need to pin down your expectations and needs from the POS system. This helps you find the system that can best cater to your business. Some of the features you want to look out for are real-time inventory tracking, automated reordering, sales reporting, and customer management. Some POS systems also offer features such as loyalty programs and more. Check them all out to make the right decision.

5. Pricing

The price of a POS system is not just limited to a subscription fee. It might come with upfront costs, hidden fees, and additional charges for updates or support. They collectively make a big expense for your organization, which is why you need to check out the pricing models. 

6. Customer support

It is also critical to check your software vendor’s support system. If they are not easily accessible or helpful, you must skip them. You need a vendor providing instant support and resolution, which can otherwise impact your business’s revenue because of inventory discrepancies and payment failures.

If you are ready to level up your business operations, you must start by improving inventory management with POS systems. Embracing a POS system will upgrade the way you manage inventory and introduce efficiency with minimal effort. Your employees will thank you for the support, and you will have all the data insights to make the right decisions, maximize profits, and scale up your business.

PayBy’s point-of-sale solutions are built to simplify in-person cashless payment transactions between consumers and businesses. This smart POS system is built to suit small to large merchants. 

Enjoy in-depth and real-time insights with data visualization to track transactions, number of sales, revenue, profit margin, inventory sell-through rates, cashier performance, and more with PayBy’s POS system. That’s not all. We also offer QR code payments, a smart box to receive and refund payments, the ability for merchants to check daily transactions, and so much more.

Get started with PayBy today.