Inventory Tracking Software for Startups - Pros and Cons

by Startacus Admin

Need an organised process to manage the inventory in your startup? Here are a few of the key things to consider...

For startups, many of them struggle to find stability in the first year, let alone survive it. They often face fierce competition, acquiring clients and juggling a lot of plates all with a limited resource pool.

Luckily, for many startups nowadays, they have access to lots of different software and tools to help fulfil their needs more easily. With a failure rate for startups at 90%, there can be many benefits from implementing certain softwares.

Inventory tracking software can be useful for those startups who can benefit from having a more organized process in place. From tracking inventory levels, monitoring sales to ordering and distribution, here are some of the pros and cons to using this software as a startup.

How inventory tracking software works

Inventory tracking softwares or sometimes referred to as inventory management allows you to do a number of things such as tracking goods along the business’s supply chain. It can give you an oversight of the inventory within your business as well as supplying sales data.

With an inventory tracking system, you can make better business decisions based on the data that the software collects, maintains and monitors. By optimizing the process of order placement all the way to the completion of the product’s journey, it helps save time, money and resources.

There are plenty of benefits to implementing a software like this but it’s also good to weigh it up with some of the negatives. So before we provide you with some helpful tips to pick the right software, here are the pros and cons of inventory tracking software.

The pros of inventory tracking software

Inventory tracking softwareA can be helpful to businesses of all sizes, regardless of how much inventory there is to manage. Startups can benefit from this software from the beginning, working alongside its growth. Here are some pros of implementing this system into your startup.

They provide efficiency

Managing inventory and tracking it in general can be very labour-intensive and this can often be time-consuming for your employees to deal with. As such, an inventory tracking software is a way of automating the processes whether that be tracking the location of stock to reordering the right amount of inventory when it’s necessary.

By automating more, you save your team the efforts of doing everything manually. Instead, they can focus on other tasks that may need their attention, which include providing clients with a more unique and tailored customer experience. 

Automation is being used more frequently in business than ever before. With business processes in general, 60% of occupations could save on average 30% of their time using automation. 

The biggest benefit from inventory tracking software and other tools that automate work processes is that it saves time, which is crucial for startups. 

Helps save on costs

Managing inventory is time-consuming but it also takes a significant amount of man hours in order to get the work done. That’s a lot of money that you’re spending on staff whether it’s within their working hours or when providing overtime. 

As the business grows, so do the inventory levels and there may be a point where you’re losing more money in labor costs than making profit. Inventory tracking software can help widen those profit margins.

It doesn’t mean that you need to get rid of your employees but the funds you use for their wages can be better focused elsewhere. When it comes to work processes, anything that can be automated is worth implementing a software or tool for. Spending it on manual labour isn’t cost-effective.

An automated system like this can also utilize your cash flow by prioritizing stock that’s best selling as opposed to buying more stock that is selling out but isn’t in demand.

Accurate in its processes

Humans are great but when it comes to computers and technology, there is a lot less scope for error. As humans, we make mistakes but software has been programmed in such a way that it’s less likely to cause errors in the process.

Having an inventory tracking software in place, it can help ensure all your records are up to date with the latest data. Whether you are a startup that operates multiple platorms whether that’s online or in-store, it can accurately monitor all of your inventory and sales data.

Its accuracy is something that’s a major benefit for businesses that can’t afford to make costly errors regularly. Humans manually entering incorrect data can do a lot of damage, so it’s worthwhile to incorporate an automated system that won’t make those mistakes.

It’s scalable

With most inventory tracking software, they can easily accommodate the growth of your business. So as you scale up your business, there’s no need to hold the company back due to a lack of resources in-house. A small team to some extent can manage the growth of a company with this sort of software in place.

The type of software plan you go for might be small to begin with but something you add additional features to as the business grows. It’s beneficial to have a software that can adapt itself to where your startup is heading.

Scalability is important for many things you incorporate into the business from software to the suppliers you use. It can make for a more stable and consistent progression in the company’s growth.

The cons of inventory tracking software

Even though there are many benefits to inventory tracking software, it would be biased to not mention some of the downsides.

It’s pricey

With 20% of businesses failing within their first year and 60% going bust within the first three years, the odds are against you as a start-up. Therefore, any financial decision needs to be given some thought.

For some software, there’s a significant upfront investment that’s needed and for some start-ups, that might not be affordable. There’s also recurring costs for maintenance of the software, along with any upgrades that might be needed.

However, it may be a necessary investment for those businesses that are in desperate need of inventory management. Even if it costs more than they can afford, it may end up providing a good ROI further down the line.

Some are incompatible 

Depending on the solution needed, you may find that some inventory tracking softwares is simply incompatible for the business.

It’s all about finding a software that fits your business purposes, rather than choosing one that doesn’t align with your requirements as a business. For example, running a single-location retail store is different to having a company that deals in manufacturing.

The type of system you choose will need to cater to the demands of the business and its complexities. It may be that the software you’re looking at implementing is not the right fit for your start-up at this current time. There may be better options out there that can tailor to your niche as a business.

A good way of getting past this is by understanding your inventory operations and which one will help enhance those operations further. You want something that’s going to better your work processes, rather than hinder them.

Tips to pick the right software for your startup

So how do you find the right software for your startup? Here are a couple of tips that might prove handy for you when investing into this software.

Do your research

When picking the right software, it’s all about doing the background research. There are going to be plenty of different inventory management softwares available but it’s all about what has a positive reputation and the best track record for your business niche.

Browse the software company websites but also make sure to read up on reviews and testimonials of clients that are already using it. This can give you a better indication of what software to choose and which ones to avoid.

Figure out what your startup needs

What does your start-up need? Knowing your requirements for the software will help you pick the best one for your business. Some start-ups might need the basic features, whereas some start-ups may need more to cater for its current growth.

Make a list of requirements and choose the software on the basis that it ticks off everything you need. At the same time, you don’t want something that offers more than you need and as such, costs a lot more to implement. The financial cost is what will likely influence your choice the most, so know your budget.

Even though there are a few cons to putting the software in place, they’re outweighed by the many benefits that the system provides. Providing more efficiency, saving money and greater accuracy in your business decisions are all ingredients you need for a successful startup.

Remember to do the research and to find what your business needs when it comes to an inventory tracking software. Your needs are likely to be different to the next startup who is looking for the same system.

 

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Published on: 21st July 2021