Manual inventory tracking compared with inventory tracking systems on your compu ter.

A good inventory tracking system accomplishes four things: 1) it shows what merc handise is in stock, 2) it shows which items are on order, 3) it notifies the re tailer when ordered merchandise is scheduled to arrive, and 4) it tells what mer chandise has been sold. This information is used to plan future purchases, to de termine what is selling and when it is selling, and it helps determine what item s need to be reordered or discontinued. The effectiveness of a pen and paper system depends on many things. These items include how much inventory the company carries, the variety of items, the freque ncy of ordering, and the number of new or one-time-only purchases. If the compan y carries a large inventory, has a large variety of items in stock, or re-orders frequently then a computerized system would be easier to use and maintain. PEN AND PAPER SYSTEMS There are three main pen and paper systems for tracking inventory: Manual Tag Sy stem, Dollar-Control System, and Unit-Control System. The manual tag system invo lves a tag that is attached to every piece of merchandise. At the point of purch ase the tag is removed and later cross-checked against the physical inventory. T his system is updated every day and is used to track how many items have been so ld and what portion of the inventory remains. This information is charted on a h andwritten graph. Down the side lists the item, and across the top runs the date of purchase. The number of items sold is entered where the item and date inters ect, and subtotaled according to date and to item. Finally the total amount is c alculated to determine the number of items that are sold during a sales period. The Dollar-control system is used to determine the cost and gross profit margin on an individual inventory item. In this system the cash register receipt is use d for cross checking information with the physical inventory. The receipt lists the product, quantity sold, and sales price. This information is cross-checked a gainst the delivery receipt, and the sales price and quantity are compared to co st. The Unit-control system also compares sales receipts to physical inventory. Inve ntory is monitored by a physical count of items in stock. Another way is to use a bin ticket. Bin tickets list stock number, item description, maximum and minim um quantities that are stocked, selling price, and any other pertinent informati on. As items are sold the bin ticket is marked and then compared to a compliment ary card in the office. This card contains information on the stock number, sell ing price, cost, number of items that are contained in a case, supplier and alte rnative supplier of the item, order dates, and delivery schedules. The retailer will do a physical check of the inventory periodically to update and track the a mount of inventory left in the bins and determine what needs to be reordered and what the profit margin is. COMPUTERIZED INVENTORY TRACKING SYSTEMS With the price of computerized inventory tracking systems going down it is now m ore affordable to buy and utilize these types of inventory control systems. They provide greater accuracy and more flexibility in the types of information and r eports that can be generated by the program, than can be obtained with a manual inventory system. The main computerized inventory tracking system is known as Po int of Sale, often abbreviated as POS. POS systems update inventory counts at th e "point of sale" and because of this instant update, retailers have a better id ea of what needs to be reordered, what items are moving, and what items are stal e. The POS system can be integrated with other add-on products like credit card sca nners, bar code scanners, receipt printers, and can also be integrated into the main accounting software. This helps to keep all financial records up to date an d available for analysis by management, sales department, and accounting departm ent. The benefits to this type of system are obvious. First it is easier to main tain and utilize than a manual system. Entry of sales information is often as si mple as scanning in the bar coded merchandise when it is delivered, and scanning the item at the check out counter when it is sold. This scanned information upd ates inventory records and also records cost and sale price. Profits are automat

ically calculated and made available for instant analysis. Pricing can be update d automatically from the main computer. The updated price is automatically appli ed to all of the selected items in stock. Product information can be updated sim ply by changing the data in the computer. Tracking sales is much simpler because all the calculations are done by the computer and can be printed out in a numbe r of financial reports. Even the financial reports can be customized to show pro fit by day or by item. Keeping an exact count on what items have been entered in to the inventory, and which items have been sold also enhances security. This up -to-date count will let the retailer know if merchandise is being stolen. Taxes on items can also be set up to portray a variety of tax rates. CONCLUSION To determine which system is best for your business examine the quantity and fre quencies in your inventory tracking system. If you maintain a small inventory wi th few items then a manual system may work fine. However if you have a medium to large inventory with more than one item in stock a computerized system may be m ore effective in tracking you inventory and maintaining your records. http://www.essortment.com/small-business-tips-pen-paper-vs-computerized-inventor y-tracking-23815.html