Purchasing and Inventory Management - Five Must-Have Tools

If you are involved in managing inventory, you are aware of the hassles that can arise due to purchasing issues. Having far too many of an obscure item or running low on a bestseller, are sure clues that you and your company can benefit from a more robust purchasing and inventory management tool. Technology has advanced over the years, such that you no longer need to keep track of purchasing activities on paper. Consider these benefits offered by software programs of today.

Order suggestion

A major benefit of using software is it can easily collect and analyze data, a task that would take an employee much longer to do manually. Look for a purchase order system that can analyze past demand, and suggest which orders need to be placed based on that knowledge. You can then use the report as a starting point, and use your own judgment on which purchase orders to create for which items. A purchase order system should also track who the item has been purchased from in the past and automatically order it from the last vendor and default the cost to the last cost paid for the item. If you aren't ready to make the jump to having the system recommend what should be ordered, look for a system that will allow you to simply enter a list of items that need to be ordered. The system will then assign the vendor and last purchase cost, so the purchase order is quickly and easily generated.

Flexible item ordering

Your business likely has its own set of product numbers that are different from your vendor's part numbers. Since your vendor is typically unfamiliar with your item numbers, it's best to place orders using their numbers. Some purchase order systems allow you to create and print purchase orders using both numbers, which is extremely helpful to you and your vendor. Another flexible purchase order tool is the ability to place orders in multiple units of measure, in case you need to purchase the item in one unit of measure and sell it in a different unit of measure.

Minimum and maximum quantity setup

This handy purchase order tool allows you to set up minimum and maximum amounts by item. This allows you to run a report to see which items are running low and need to be ordered, or which are overstocked and may need to be liquidated.

Drop shipment

Most businesses do receive requests for drop shipments, at least every now and then. If you need to order items and have your supplier ship them directly to your customer, a tool for handling drop shipments is a must. Handling drop shipments means that the system will allow you to specify a ship-to address that is different than your own address. Without this tool you will end up manually entering ship to data which results in wasted time and increased margin for error. This feature is crucial for those who drop ship large quantities of items. It should also allow you to identify the sales order to the purchase order, so that the sales order can automatically be invoiced as soon as the vendor communicates that the order has shipped.

Receive partial orders

As we all know, sometimes the orders we place are not always delivered in full. In these cases, it's helpful to have the choice of whether to receive the partial shipment and keep the rest of the purchase order open, or to simply receive the items and cancel the remainder of the items. Sometimes the vendor will notify you that they have shipped what they have and the remainder of the order will be canceled. A proper purchase order system will include an option that allows the user to cancel the remainder of an order, instead of having to manually cancel each line.

All of these purchase order software tools can help you keep your inventory stocked with the items you need, and lean on those that you don't. They also help you manage purchase orders more efficiently, saving your company time and money.

Comments (1) -

  • wms
    You defined it well and these points must be shared before looking for warehouse inventory management systems online or committing yourself to this idea. A must read notion, keep posting!
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