Tracking inventory can be aggravating, especially when there are hundreds of materials stored in warehouses. How does a firm sort through inventory, and track of what materials are in stock and which ones are not? What are options for tracking inventory?
Paper
Some companies rely on paper to help keep track of inventory, although there are some drawbacks to taking a paper-only approach.
Inaccuracy. When relying on this approach, it will be up to individuals to enter in inventory information. Mistakes can and will be made. Unless someone else is double checking and verifying what was submitted, then there is a risk of inaccurate information being recorded, or if handwritten, the entries may be hard to read.
Time Consuming. The amount of time it takes to track inventory can be massive. If there are thousands of unique materials in the warehouse, it will take time and effort to scroll through pages of information.
Waste. Imagine how much paper is needed to track inventory. There will be a lot of waste involved. Time is wasted sorting through and labeling materials. Money wasted by having to constantly purchase paper. Using a paper-only approach can end up costing businesses in the long run.
Excel
Another popular method for tracking inventory is Microsoft Excel. Compared to the paper-only approach, this method is relatively easy to use and cost effective.
Data Entry. Depending on how large a company’s inventory is, it will take time to type in data. The larger the inventory the more difficult it is to manage through Excel.
Limitations. What if the inventory moves from one location to another? What if more than one person needs to access the file at the same time? These issues can slow down productivity and cost a company in lost revenue.
Construction Accounting Software
The rise of construction accounting software over the past decade has made it easier than ever to keep track of inventory. Users can produce a complete history for all inventory, then select the materials used for a job. Those materials will then be automatically deducted from the inventory total.
Real-time Data. An inventory module in construction accounting software updates in real time so companies can better forecast and make better purchasing decisions. Users can see just how much of a certain material is in stock at any given time.
Easy to Access. Construction accounting software makes it is easier than ever to search through inventory. Users can search by type of material, by job number, material number and more and have access to all of the information needed about a particular item with just a few key strokes.
More Functionality. Construction accounting software offers users access to a database of inventory, the ability to track material in multiple locations in real time and can tie in to other accounting aspects such as job costing.
