Inventory management software development

A ledger of movements, not a single number

Dependable inventory software treats stock like a bank account. Instead of overwriting a quantity, it records each movement: received from a supplier, moved between locations, picked for an order, returned, written off or adjusted after a count. The current quantity is the sum of those movements. That means any figure can be traced back to the events that produced it, and mistakes can be corrected with a further movement rather than by guessing.

Each movement should carry a date, a user, a reason and a reference such as an order or delivery number.

Quantities worth separating

Designing the stock model

Reconciling stock counts

1. 01

   Plan

   Choose locations or items to count.

   Output: Count list

2. 02

   Count

   Record quantities found, ideally by scanning.

   Output: Counted figures

3. 03

   Compare

   Differences with system figures shown.

   Output: Variance list

4. 04

   Investigate

   Large differences checked before accepting.

   Output: Explained variances

5. 05

   Adjust

   Adjustment movements posted with reasons.

   Output: Corrected stock

Reorder points and suggestions

A reorder point is the level at which new stock should be ordered so it arrives before running out. It depends on how quickly the item sells and how long suppliers take to deliver, plus a safety margin for variation. Software can suggest reorder quantities from recent usage and lead times, but buyers should be able to adjust them for seasonality, promotions or supplier minimums. Suggestions that buyers can see and edit are more trusted than fully automatic orders.

Systems inventory connects to

• Sales channels

  Online shop and order systems reserve and reduce stock.

• Purchasing

  Purchase orders create on-order quantities.

• Accounting

  Stock value and cost of sales passed for the accounts.

• Warehouse tools

  Scanners and label printers record movements.

Stock value and the accounts

Inventory software usually records costs for each receipt so stock can be valued, but the accounting treatment, such as which costing method to use, should be agreed with your accountant. Decide which system calculates value and how figures pass to accounting, so the two agree at month end.

Reservations and overselling

When orders arrive from several channels, such as an online shop, marketplaces and phone orders, each must reserve stock as soon as it is accepted. Otherwise two channels can sell the last item at the same moment. Reservations reduce available stock immediately and are released if an order is cancelled. A small buffer held back from online channels can absorb timing gaps between systems, at the cost of occasionally showing fewer items than you hold.

Agree how long unpaid or unconfirmed orders may hold stock before reservations lapse.

Batches, expiry and serial numbers

Food, cosmetics, chemicals, medical supplies and electronics often need batch, expiry or serial tracking. The stock model then records which batch was received, where it is stored and which orders it went to. Picking can be guided to use the earliest expiry first, and a recall can be traced to specific customers. Adding traceability later is difficult, so decide early which items need it.

Inventory reports that matter

Useful reports include stock below reorder point, slow-moving items, variances from recent counts and the value of stock by location. Each should lead to an action, such as ordering, discounting or investigating.